On November 18, the Office of Financial Research (OFR) submitted its Annual Report to Congress. The 177-page report concludes that “significant downside risks to financial stability persist amid high uncertainty” and that “[t]here remains a striking contrast between the quick recovery of financial markets and the slower recovery of the economy.” We take a brief look at some of these risks and the potential impact on consumers, corporations, and securitization.

Extraordinary times call for extraordinary measures. And the Fed continues to respond appropriately. On April 9, the Federal Reserve once again drew on its full range of authorities to expand and establish lending facilities to provide up to $2.3 trillion in loans to stabilize households, communities and businesses of all sizes during the pandemic crisis and to “ensure that the eventual recovery is as vigorous as possible”.

Aircraft ABS are currently insulated from coronavirus-related disruption in global travel. Still, a prolonged slowdown in global air traffic would negatively impact aircraft ABS structures.

SFA's recent CLO white paper explores balancing crucial lending with financial safety and soundness.