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The Financial Crisis at the Kitchen Table: Trends in Household Debt and Credit

30 Pages Posted: 5 Jan 2011  

Meta Brown

Federal Reserve Bank of New York

Andrew Haughwout

Federal Reserve Bank of New York

Donghoon Lee

Federal Reserve Bank of New York; New York University

Wilbert van der Klaauw

Federal Reserve Bank of New York; IZA

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 2010

Abstract

The Federal Reserve Bank of New York (FRBNY) Consumer Credit Panel, created from a sample of U.S. consumer credit reports, is an ongoing panel of quarterly data on individual and household debt. The panel shows a substantial run-up in total consumer indebtedness between the first quarter of 1999 and the peak in the third quarter of 2008, followed by a steady decline through the third quarter of 2010. During the same period, delinquencies rose sharply: Delinquent balances peaked at the close of 2009 and then began to decline again. This paper documents these trends and discusses their sources. We focus particularly on the decline in debt outstanding since mid-2008, which has been the subject of considerable policy and media interest. While the magnitudes of balance declines and borrower defaults, represented as "charge-offs" on consumers’ credit reports, have been similar, we find that debt pay-down has been more pronounced than this simple comparison might indicate.

Keywords: household debt, mortgages, household finance, financial crisis

JEL Classification: G20, D14, D12

Suggested Citation

Brown, Meta and Haughwout, Andrew and Lee, Donghoon and van der Klaauw, Wilbert, The Financial Crisis at the Kitchen Table: Trends in Household Debt and Credit (December 1, 2010). FRB of New York Staff Report No. 480. Available at SSRN: https://ssrn.com/abstract=1734421 or http://dx.doi.org/10.2139/ssrn.1734421

Meta Brown (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Andrew Haughwout

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-2685 (Phone)
212-720-1844 (Fax)

Donghoon Lee

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-8699 (Phone)
212-720-1844 (Fax)

New York University

NY
United States

H. Wilbert Van der Klaauw

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-5916 (Phone)
212-720-1844 (Fax)

IZA ( email )

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