The IOU Abyss

Dimitris N. Chorafas

Chapter 4 in Household Finance, 2013, pp 87-106 from Palgrave Macmillan

Abstract: Abstract There is no unlimited borrowing ability for families, just like there is no unlimited borrowing for companies and sovereigns. There are limits in all cases, a truth which is being revealed to the common citizen the hard way. The deep economic and financial crises which started in 2007 and were followed by the drying up of bank credit were the catalysts of a change in credit policies which is still in process. Five factors characterize a financial bubble: Increased leverage; High liquidity; Much bigger turnover; New issuance of money which destabilizes the monetary base; The “democratization” of credit along with the “socialization” of risk associated with it.

Keywords: Real Estate; House Price; Credit Card; Consumer Credit; Consumer Spending (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-29945-1_4

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DOI: 10.1057/9781137299451_4

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