BIS Review 67/2006  1  has risen sharply (see exhibit). 2 This increase is even more pronounced when (on a consolidated basis) cash is measured relative to investment, defined as the sum of capital spending and research and development (R&D) spending during the preceding twelve months. The ratio of cash to investment has averaged about 60 percent during the past few decades.
At the national level, the rise in expected foreclosures could add significantly to the inventory of vacant unsold homes – already at more than 2 million units at the end of 2007 – putting further pressure on house prices and housing construction. 4 Helping distressed borrowers Policymakers and stakeholders have been working to find effective responses to the increases in delinquencies and foreclosures.