Multiple media outlets featured coverage of the St. Louis Fed's recent research symposium, "Restoring Household Financial Stability after the Great Recession: Why Household Balance Sheets Matter." In an interview on KWMU-FM radio's "St. Louis on the Air" program, Senior Advisor and Policy Officer Ray Boshara and Assistant Vice President Bill Emmons talked about the Bank's Household Financial Stability initiative.
Boshara and Emmons discussed the role of weak household balance sheets in many families' loss of wealth during the financial crisis, and the importance of stronger household balance sheets in national economic growth. They also talked about lessons learned during the recession and changes that need to happen to keep families—particularly younger ones—from being caught in such an economically vulnerable position in the future.
The symposium also drew coverage from columnist David Nicklaus of the St. Louis Post-Dispatch, who shared Emmons' views and discussed the importance of the symposium's topics. "Consumer spending makes up more than two-thirds of economic activity, and we know from experience that stresses faced by one group of consumers can sink the whole economy … If we understand why those families went so deep into debt, and understand other stresses faced by families today, then maybe we can build an economy that's more resilient, and one that works better for the most vulnerable members of society," Nicklaus wrote.
And in the St. Louis Beacon online publication, Boshara discussed the HFS initiative. "Household balance sheets have been relatively understudied but are increasingly recognized as important for both the stability and mobility of families -- but also for the growth of the nation," Boshara said. "Debt was the real story of the last several years, and if you don't tell the debt story and understand debt better you don't really understand what's going on. One of the things that we believe is holding back the recovery is weak balance sheets."
Federal Reserve Gov. Jeremy Stein, who attended the research symposium and delivered a keynote address, also attracted media attention. American Banker, Bloomberg, The Economist, Reuters, and the Wall Street Journal published stories about his comments.
In Gov. Stein's speech, titled "Overheating in Credit Markets: Origins, Measurement, and Policy Responses," he talked about what he sees as possible overheating in some credit markets. He listed factors that can contribute to overheating: financial innovation, changes in regulation and a change in the economic environment that alters the risk-taking incentives of agents making credit decisions. When talking about the corners of credit markets that have him concerned, he focused in particular on junk bonds, mortgage real-estate investment trusts and commercial banks' securities holdings.