Fed's Rosenblum: Changing Risks in the Global Economy

Dallas Fed Executive Vice President and Director of Research, Harvey Rosenblum, spoke in Chile yesterday at the Global Interdependence Center. The text of Rosenblum's speech isn't available, but here are the slides he presented: Changing Risks in the Global Economy

Click on graph for larger image.

The first slide shows the increase in percentage of S&P rated junk bonds from 1980 to 2006. Another slide shows that credit spreads are quite low for junk bonds (see presentation, page 5)


This slides shows the firming credit standards for business loans. I expect standards to continue to tighten, especially for CRE and C&D loans.

See this Fed chart for CRE loan delinquency rates. Delinquency rates are rising for CRE loans - up to 1.28% in Q4 2006 from 1.12% in Q3 2006 - but they are still fairly low.


This third slides shows credit standards for consumer loans through 2006 The graph shows rapid tightening for mortgage loans at the end of 2006. However this graph stops before the significant tightening that started in February of 2007.

Right now the only credit crunch is sector-specific - mostly subprime mortgage loans. However credit standards for business loans are starting to tighten too.