Our liaison with the banks suggests that there are a few borrowers needing assistance to manage the transition. Over the past year, some banks have reported that there has been a small deterioration in asset quality.
For some borrowers this has tended to be only temporary as they take time to adjust their financial affairs to cope with the rise in scheduled payments.17 For a small share of borrowers, though, it reflects difficulty making these higher payments. That share could increase in the event that an adverse shock led to a deterioration in overall economic conditions.