Monday, May 18, 2020

Federal Reserve issues report assessing risks to financial system

https://www.federalreserve.gov/publications/files/financial-stability-report-20200515.pdf

 

  • Financial asset prices are vulnerable significant decline
  • Business debt was high before the pandemic
  • Many households can no longer support their level of debt due to pandemic
  • There is elevated prospect of losses at financial institutions – especially hedge funds
  • Federal Reserve response has been unprecedented in its speed and forcefulness

 

[Needless to say, there are critics who say this assessment is overly optimistic.]

 

Charlie Cooper

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