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Chart 54
Credit Cards Have Become Loan Product of Adverse Selection
| Year |
Credit Card (dollars in billions) |
Percent Change |
Home Equity (dollars in billions) |
Percent Change |
| 1995 |
443.491 |
21% |
84.7 |
5% |
| 1996 |
499.624 |
13% |
91 |
7% |
| 1997 |
536.72 |
7% |
105.4 |
16% |
| 1998 |
576.468 |
7% |
103.7 |
-2% |
| 1999 |
604.468 |
5% |
100.4 |
-3% |
| 2000 |
678.9 |
12% |
131 |
30% |
| 2001 |
713.328 |
5% |
155.5 |
19% |
| 2002 |
732.665 |
3% |
213.9 |
38% |
| 2003 |
752.792 |
3% |
285 |
33% |
| 2004 |
781.056 |
4% |
401.5 |
41% |
| Oct. 2005 |
798.9 |
2% |
438.2 |
9% |
Notes: The 80/20 Rule: 80% of losses come from 20% of customers, those customers who don't own homes. Revolving Home Equity data from H.8 Assets and Liabilities of Commercial Banks in the U.S. Credit card data from G.19 Seasonally Adjusted Consumer Credit.
Sources: Federal Reserve and CIBC World Markets.
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