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At first blush, the banks' business loans look very profitable.
"Bank loans look good in the medium term, but the market has gotten ahead of itself," Ms. Gaffney said.
So, however reasonable student loans look on paper now, the graduates of tomorrow could end up a powerful electoral force.
In Berkeley, California, home of the first PACE scheme, the take-up rate is similarly paltry.Homeowners are unimpressed chiefly because the interest rates on the loans look high.
"Not only do additional loans look necessary next year but longer-term loans may eventually need to be made available on more generous terms," he said.
This recycling of funds keeps up appearances on the balance sheets of the Bank and the Fund, making bad loans look better than they really are.
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The local housing market, which accounts for most of the loans, looks overheated.
They may instead grow more cautious, especially if repayment of their loans looks doubtful.
It may be worth noting that none of these loans looked especially risky when the securitization was being marketed.
With a flight to quality last year pushing up Treasury bond prices and risky loans looking like losses waiting to happen, banks plowed money into government bonds.
Crises of confidence are likely, given that the rich world's trend rate of growth (and thus the ability of debtors to service their loans) looks set to slow.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com