Investing.com - Financial Markets Worldwide

US: Government Now 2nd Largest Holder Of Nonrevolving Credit

ByThe National Bank of Canada
Published 08/09/2012, 01:53 AM
Updated 05/14/2017, 06:45 AM
FISI
-0.04%

Consumer credit expanded an annualized 3.1% in June on the back of yet another solid increase in nonrevolving credit which rose to a new record high. Historically, such a development would have been interpreted as very beneficial for private financial institutions. This is no longer the case. When it comes to nonrevolving credit, government has become the only game in town. As today’s Hot Chart shows, the Federal government in June leapfrogged finance companies to become the second largest holder of nonrevolving credit. Never before has the public sector played a larger role in the attribution of consumer credit in the economy. What’s behind the surge? Student loans backed directly by the government (introduced in July 2010). According to the Federal Reserve, student loans have become the largest component of household debt after mortgages, eclipsing auto loans as well as revolving loans such as HELOCs and credit cards. As shown, it is also the only form of consumer debt that has grown since the peak of consumer debt in 2008.
Government now 2nd largest holder of nonrevolving credit

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.