A recent report from the Federal Reserve Bank of St. Louis notes that September marked the 10th anniversary of the collapse of Lehman Brothers, marking the critical stage of the financial crisis. They say that many economists argue that one of the main reasons why the subsequent recession was “great” was due to high levels of leverage and debt, particularly in the financial and household sectors. To that end, they’ve tracked the evolution & composition of domestic debt in the U.S. going back to 1990.
“While total domestic debt has not fallen substantially in the last 10 years, there have been large changes in its composition. In particular, the two sectors whose high indebtedness is considered to have played a large role in triggering the recession—household and financial—have substantially reduced their debt levels.”
Click here to read the full story at the St. Louis Fed.
