BIS Study Suggests Households, Companies Set to Reduce Debt
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Households and companies will continue to reduce debt built up before the financial crisis, according to a report by the Bank for International Settlements.
A study of 20 systemic banking crises that were preceded by surges in credit showed that in 17 cases, debt relative to gross domestic product returned to levels seen before the crisis, economists Garry Tang and Christian Upper wrote in the Basel, Switzerland-based BIS’s latest quarterly review.