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Is there another financial crisis brewing in household debt?

The financing of households is fine if incomes keep growing. If not, high debt levels could begin to bite, and we will have a double whammy, writes T N Ninan

T N Ninan

We have heard these last few years about the twin-debt problem faced by companies and banks. We’ve read reports like Credit Suisse’s “House of Debt”, on companies that don’t have the earnings to pay interest on debt, let alone the principal. And of course we have read more than we would wish to about how banks have been writing off record sums of bad loans. So far, though, no one seems to have looked at the extent of money that is being borrowed by individuals, and the rising levels of household debt. Time to look at it when the consumption engine that has ...