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Debt Collection News Roundup – June, 2018

Here at Access Credit Management we like to make sure we bring our readers interesting and relevant news about our industry so once a month we’ll be publishing a News Roundup.  This should keep you up to speed with all the important goings on within the sector so that you have a resource that keeps you fully informed of all the latest news.  It would be interesting to know what you, the readers, think of the stories that feature here.

The Bank for International Settlements (BIS), an international financial institution owned by central banks, has issued a warning that the global economy risks falling into a debt t rap in developed markets, and particularly in China.  Nations are advised to follow a “narrow path” to avert disaster during the next slowdown.  With burgeoning imbalances in China, in particular, despite the steps being taken by that nation to rein in serious financial excess, economists are warning that rising interest rates will increase the costs of servicing debt and potentially threaten expansion.  According to the general manager of BIS, the easy monetary policy since the financial crisis has resulted in swollen private and public sector balance sheets and higher debts that will impact progress in future.

Outstanding levels of card borrowing have increased over the past year by a worrying 5.7% while credit card purchases in May were 193 million, well above the previous 12 month average of 181 million.  This has led to warnings that the increase in credit card spending may impact borrowers’ ability to keep up with rent or mortgage payments.  Lenders are currently being urged to pay close attention to their clients’ ability to keep up with repayments in order to look after borrowers’ best interests.

Meanwhile an increase in remortgaging by homeowners has resulted in a boost in the number of mortgage approvals in May.  Industry insiders are concerned that these figures are hiding the problems in the mortgage market that have seen a decrease in the number of mortgage approval for new purchases.  With the Bank of England keeping interest rates on hold, here is a possibility that mortgage rates may rise and some cheaper funding schemes, such as the Term Funding Scheme coming to an end.

On a seasonal, holiday note, Eurozone countries agree to a historic, long sought debt relief deal for Greece which allows Athens more time to repay the €96.9 billion (££85 billion) worth of loans with an extended grace period during which Greece will pay little or no interest.  According to Greek Finance Minister, Euclid Tsakalotos, this is a sign that Greece is turning a new page that should help end the Greek economic crisis.  Greece has also been granted a final cash loan of €15 billion that will mean the country can carry on paying its bills.

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