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Financial Fragility Indicator Deteriorates Rapidly As Balance Sheet Weakness Approaches Historical Average, Report Says

This report does not constitute a rating action.

NEW YORK (S&P Global Ratings) Oct. 4, 2022--The Financial Fragility Indicator (FFI) plummeted to -0.05 in the second quarter and is now on the precipice of the historical average, or zero. This indicates that financial conditions have weakened dramatically, and conditions are pointing to rising financial fragility in 2023, said S&P Global Ratings in its article, "Financial Fragility Indicator Deteriorates Rapidly As Household And Firm Balance Sheet Weakness Approaches Historical Average," published today.

Both the household and nonfinancial corporate sectors experienced deteriorating financial conditions, with quarter-over-quarter declines of 83% and 103%, respectively.

Leverage risks and liquidity risks for both sectors worsened, deteriorating net wealth.

The reports are available to subscribers of RatingsDirect at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase copies of these reports by calling (1) 212-438-7280 or sending an e-mail to research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request copies of these reports by contacting the media representative provided.

U.S. Chief Economist:Beth Ann Bovino, U.S. Chief Economist, New York + 1 (212) 438 1652;
bethann.bovino@spglobal.com
Contributor:Joseph Arthur, Iowa City
Research Contributor:Shruti Galwankar, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
Media Contact:Jeffrey Sexton, New York + 1 (212) 438 3448;
jeff.sexton@spglobal.com

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