Past Recessions and Loans
Past patterns of delinquency rates and recessions are not encouraging. According to the Federal Reserve Bank of St. Louis data, noticeable increases in commercial and industrial loan delinquency rates occurred during the last three recessions.
A growing economy can often be its own stumbling block, as increasing prosperity means people are more ready to loan out money. However, that easy credit also typically leads to people taking on too much debt as the economy starts to expand faster than it can sustain, and spiking delinquency rates are often a sign that the days of easy credit are numbered.
