Search Results
Journal Article
Eleventh District Nonprofits Comment on Clients' Credit Education Needs
In a recent Community Outlook Survey by the Dallas Fed's Community Development Office, several nonprofit service providers observed that credit scores were a main factor affecting low-to moderate-income clients' access to credit.
Speech
Early lessons from recent financial turmoil.
Presented by Eric S. Rosengren, President and Chief Executive Officer, Federal Reserve Bank of Boston, for the South Shore Chamber of Commerce, Quincy, MA, March 6, 2008
Journal Article
Rollout of FACTA complete
Conference Paper
The role of information asymmetry and financial reporting quality in debt contracting: evidence from the secondary loan market
I employ unique data on secondary loan trades to explore how information asymmetry and the quality of financial reporting affect the trading spreads of private debt securities. There are two primary findings. First, the bid-ask spread in secondary loan trading is positively related to firm and loan-specific characteristics associated with a high information asymmetry environment. Loans of private firms, loans without an available credit rating, loans syndicated by less reputable arrangers, distressed loans, and loans of loss firms are traded at significantly higher bid-ask spreads. Second, ...
Discussion Paper
The Making of Fallen Angels—and What QE and Credit Rating Agencies Have to Do with It
Riskier firms typically borrow at higher rates than safer firms because investors require compensation for taking on more risk. However, since 2009 this relationship has been turned on its head in the massive BBB corporate bond market, with risky BBB-rated firms borrowing at lower rates than their safer BBB-rated peers. The resulting risk materialized in an unprecedented wave of “fallen angels” (or firms downgraded below the BBB investment-grade threshold) at the onset of the COVID-19 pandemic. In this post, based on a related Staff Report, we claim that this anomaly has been driven by a ...
Working Paper
The evolution and determinants of emerging market credit spreads in the 1990s
This paper develops measures of emerging market credit spreads for the 1990s, based on data on new bond issues and bank loans, that cover a broader range of borrowers than the Brady bond spreads most commonly used to date. These measures are used to identify the impacts of credit ratings, maturity and currency denomination on spreads. We find important regional differences in spreads across the developing world, even after controlling for risk and maturity. We also identify the evolution of spreads during the 1990s up until the advent of the Asian financial crisis, holding other determinants ...
Journal Article
Credit risk data may help target foreclosure mitigation
What Ninth District areas are being especially hard hit by foreclosure?
Journal Article
Use of alternative credit data offers promise, raises issues
Companies are beginning to use alternative credit data in a variety of ways for the purposes of making credit decisions. This article looks at the prospective benefits of using the new data, examines the potential usefulness of various sources of alternative data, and offers some considerations for lenders, consumers, and policymakers when these data are used.
Conference Paper
Effectiveness of online early intervention financial education programs for credit-card holders
As part of The Saint Paul Foundation?s Credit Card Project, three credit card issuers conducted randomized tests of whether offering online credit card education to credit cardholders is effective in changing behavior. The targeted populations were either new cardholders or cardholders reaching the point of first delinquency, and two of the tests involved college students. Completion of online credit education correlates with more responsible credit card usage, but the experiments don?t prove that the education causes this behavior. Experiments with college student cardholders by Wells Fargo ...
Journal Article
Campaign urges hurricane victims to contact their banks
A new public service campaign encourages people affected by Hurricane Katrina to contact their lenders so they mitigate damage to their credit histories.