Fed Official Tells Banks: Beware Consumers Who Pile Up
American Banker (11/01/00) Vol. 140, No. 43 p.5; Daigle, Lisa

Federal Reserve Board Vice Chairman Roger W. Ferguson has stated that banks and thrifts are vulnerable to an economic downturn due to their strong earnings and assets, but they should be wary of the sharp increase in consumer debt. However, Ferguson added that the fact that people are accumulating more debt does not necessarily signify a problem, because gains in housing values and the stock market have raised wealth. He maintains that lenders should be prepared in case the economy sags and borrowers become strapped.

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