The data shows that the widespread use of mortgage loans with 100 per cent deferred amortisation has been a very bad idea – since the system only operates smoothly if house prices continue to rise. Finally, our preliminary analyses show that households with deferred amortisation have higher gross debt, both in nominal terms and relative to income, than households opting for loans with amortisation.
More recently, when the failure of Silicon Valley Bank led to the loss of deposits at other banks, the discount window and a new facility to help ensure banks have the ability to meet the needs of all their depositors have been effective at containing stresses in the banking system.