Household debt as a whole represents an economic aggregate. A too high household debt, especially if it is a variable rate (that is, the interest rate payable on a debt contracted in the past following the change of the current interest rates) is a potential vulnerability for the economy of a country. It is then subject to financial crises or falling consumption in case of sudden rate increases.
Household debt is often cited as an example, since the end the Second World War, while often both adults in a household now receive a salary, U.S. households are less able to save money and get into debt. Small Loans in Sydney allows borrowers to achieve their goals in a sustainable manner.
In some countries, households are relatively low debt compared with other developed countries. Although their debt ratio has risen sharply during the first decade of the twenty-first century, the household debt to net household assets ratio remains relatively low and amounted in 2007 to 13.84% 18.
From 1995 to 2005, household wealth has increased by 10% per year, higher than the GDP growth of 3.7%. This increase in wealth is the result of rising property prices fueled by low interest rates.
The debt markets, money market for short-term debt ( 1 year) are much larger volume than the market action. In 2010, outstanding on the global bond market end of 2010 amounted to 95 trillion ($95,000 billion), of dollars.
But the most important assets are now on the market for derivative contracts whose importance has increased significantly. Outstanding derivatives markets (notional outstanding amounts) do not represent a real absolute value, many of these contracts (option to buy or sell ) relate to the same values (euros, dollars, oil, rice) and cancel each other. Their gross market value is defined as the net asset value at the date of estimation.
Note the increase in derivatives markets instead of credit default swaps, CDS insurance on the risk of debt defaults, which have already led to the collapse of the insurer American International Group in 2008. This greatly complicates the consequences of a default by a country like Greece. March 1, 2012 the International Swaps and Derivatives Association has announced that the CDS on Greek debt would not be activated.
Mezzanine lenders are often private equity firms, banks and special mezzanine funds. The higher interest-bearing mezzanine is ideally complemented by classic low interest-bearing loans. Mezzanine financing is of great importance, in particular in the area of private equity leveraged buy-outs, where there is usually an important component of the capital structure, as it allows the investors to keep the equity investment low.
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