Discussion Paper
Household and Business Debt: A Fire-Sale Risk Analysis
Abstract: As of year-end 2019, nonfinancial business debt (BD) and household debt (HD) as a share of GDP were at similar levels of around 74 percent, and yet Federal Reserve Financial Stability Report suggested that BD posed greater risks to financial stability than HD. Since the onset of the pandemic, the size of aggregate BD has increased considerably as a result of roughly $1.25 trillion of new issuance, while HD has grown by less than $100 billion. This note looks through the lens of fire-sale risks to show why nonfinancial BD is more concerning for financial stability than the HD.
https://doi.org/10.17016/2380-7172.2625
Access Documents
File(s): File format is text/html https://www.federalreserve.gov/econres/notes/feds-notes/household-and-business-debt-a-fire-sale-risk-analysis-20210201.htm
Bibliographic Information
Provider: Board of Governors of the Federal Reserve System (U.S.)
Part of Series: FEDS Notes
Publication Date: 2021-02-01
Number: 2021-02-01-1