| 翻訳と辞書 |
| Leverage cycle ： ウィキペディア英語版 |
Leverage cycle
Leverage is defined as the ratio of the asset value to the cash needed to purchase it. The leverage cycle can be defined as the procyclical expansion and contraction of leverage over the course of the business cycle. The existence of procyclical leverage amplifies the effect on asset prices over the business cycle.
== Why is leverage significant? ==
Conventional economic theory suggests that interest rates determine the demand and supply of loans. This convention does not take into account the concept of default and hence ignores the need for collateral. When an investor buys an asset, he may use the asset as a collateral and borrow against it, however the investor will not be able to borrow the entire amount. The investor has to finance with his own capital the difference between the value of the collateral and the asset price, known as the margin. Thus the asset becomes leveraged. The need to partially finance the transaction with the investor’s own capital implies that his ability to buy assets is limited by his capital at any given time.
Impatient borrowers drive the interest rate higher while nervous lenders demand more collateral, a borrower’s willingness to pay a higher interest to ease the concerns of the nervous lender may not necessarily satisfy the lender. Before the financial crisis of 2008 hit, lenders were less nervous. As a result, they were willing to make subprime mortgage loans. Consider an individual who took out a subprime mortgage loan paying a high interest relative to a prime mortgage loan and putting up only 5% collateral, a leverage of 20. During the crisis, lenders become more nervous. As a result, they demand 20% as collateral, even though there is sufficient liquidity in the system. The individual who took out a subprime loan is probably not in a position to buy a house now, regardless of how low the interest rates are. Therefore, in addition to interest rates, collateral requirements should also be taken into consideration in determining the demand and supply of loans.
抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』
■ウィキペディアで「Leverage cycle」の詳細全文を読む
スポンサード リンク
| 翻訳と辞書 : 翻訳のためのインターネットリソース |
Copyright(C) kotoba.ne.jp 1997-2016. All Rights Reserved.
|
|