
Hyun Song Shin on the New Financial Stability Risks
Odd Lots
Benefits of Lengthening Duration for Financial Stability and Mitigating Risks
Lengthening duration has advantages such as mitigating financial stability risks. It reduces rollover and maturity mismatch stress. Many bankruptcies have been avoided due to debt terming out. Mortgage duration has also lengthened in the household sector. However, there is a downside of additional risk from rate of duration.
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