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BOE's Brazier: 'Debt Strikes Back’ or ‘The Return of the Regulator’?
In a speech to the University of Liverpool’s Institute for Risk and Uncertainty, Alex Brazier, Executive Director, Financial Stability, and a member of the Financial Policy Committee, considers the recent developments in household debt, how that debt can pose dangers to the wider economy, and the three lines of defence put in place by regulators to guard against those dangers. High levels of mortgage debt can make downturns deeper by causing consumers to aggressively cut back spending in order to service their mortgages. High levels of consumer debt – like credit card debt and personal loans – can make banks ... (full story)