Importance of Measuring Household
Liability Details and Net Worth
Working Party on Financial Statistics
OECD
Paris, France
October 13, 2008
Susan Hume McIntosh
Sr. Economist and Special Project Coordinator
Federal Reserve Board
Washington, DC 20551
smcIntosh@frb.gov
Background on Data Collection
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SNA approach is to collect short-term and
long-term loans
OECD collects data on financial and
nonfinancial assets of households
Liabilities split into mortgages, consumer
credit, and other debt could be more useful
U.S. financial accounts present this split
Useful in analyzing current crisis
Household Home Mortgage Debt
U.S. Home Mortgage Debt
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Mortgages not written down until lender
charges-off the loan
Charge-off treated as a flow
Better approach might be to treat charge-off
as an ”other volume changes”
MBS are recorded at book value
Mortgages on investment properties and
construction loans are recorded in the
nonfinancial noncorporate sector
House Prices
U.S. House Prices
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Benchmarked to the 1999 American Housing
Survey
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Perpetual inventory method using OFHEO
purchase-only price index
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Investigating using Case-Shiller national price
index or national index from Loan
Performance
Consumer Credit
Consumer Credit
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Continued borrowing in the form of consumer
credit
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Recently heavy reliance on revolving credit
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Nonrevolving credit driven by auto sales remains
very weak
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Tells different story than mortgage debt growth
Household Financial Obligations Ratio
Home Mortgage Lenders
Household Net Worth Relative to
Disposable Personal Income
What Does All This Mean
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Collection of financial statistics is important
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More liability details could help
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Data on securitization vehicles would also be
useful
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A full household balance sheet should be a
goal