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Recent Editions
Risk Channel
North America
American consumers' expectations about the risk of debt delinquency have risen to their highest level in more than four years, according to a new report from the Federal Reserve Bank of New York. Its September Survey of Consumer Expectations showed that the average perceived probability of missing a minimum debt payment during the next three months increased for the fourth consecutive month to 14.2%, the highest level since April 2020 when it was 16.1%. Outside of the pandemic, last month's reading was the highest since January 2017. The probability of losing one's job in the next 12 months was flat in September when compared with August, though the probability of voluntarily leaving a job ticked up from 19.1% in August to 20.4% in September, the highest level since July. “For people with good incomes and good credit scores, things are going well; they’re still able to access plenty of credit and, by and large, paying on time,” said Ted Rossman, senior industry analyst at Bankrate. “If you’re in the half who’s using a card for convenience and rewards, life is good. Now the other half, that can be a much more troublesome situation when you think about potentially longer-term credit card debt.”
Full IssueRisk Channel
UK/Europe
Sam Woods, chief executive of the Bank of England's Prudential Regulation Authority (PRA), has cautioned that excessive regulation could turn the City of London into a "graveyard." In a speech at the annual Mansion House banquet, he stressed that "risk is the lifeblood of a thriving capitalist economy," and essential for growth and innovation. Woods highlighted the need for regulators to manage risks rather than eliminate them, stating that "it is implausible" for businesses to thrive amid increasing regulation. The PRA's recent decision to abolish the bankers' bonus cap was presented as a move towards enhancing competitiveness. However, Woods pointed out that the deferral time for bonuses under the senior managers regime was probably over-long and harming competitiveness, and suggested it should be reduced from eight years to five. Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), echoed this sentiment, noting that the new growth objective has led to a more open discussion about risk appetite. David Postings from UK Finance also stressed the importance of balancing risk and consumer protection to support economic growth.
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