Definition of non-financial debt

The term non-financial debt is used to refer to the aggregate of debt owed by households, government agencies, non-profit organisations, or any corporation that is not in the financial sector. This can include loans made to households in the form of mortgages, or amounts owed on credit cards. It can also include bank loans to corporations, or corporate bonds they have issued to raise money. Economic forecasters might focus on the whole number or split it into non-financial household debt and non-financial corporate debt which can tell them different things about the health of an economy. Despite the impact of the financial crisis which was supposed to trigger deleveraging, some economists believe developed world nations are still trapped in a debt supercycle.


Non-financial debt in the news

In February 2013 an FT writer observed that in December 2008, total non-financial debt in the US stood at $34.4tn. While by the end of September 2012 (four years into the financial crisis), it exceeded $39tn. 

In April 2013 an FT Alphaville post considered the sharp rise in China's non-financial and non-government debt.

In February 2013, Morgan Stanley warned on the global increase in non-financial debt in this video interview on ABC.

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