Each quarter, the Board of Governors of the Federal Reserve System releases the Financial Accounts of the United States (Z.1 tables). They include data on transactions and levels of financial assets and liabilities, by sector and financial instrument; and full balance sheets, including net worth, for households and nonprofit organizations, nonfinancial corporate businesses, and nonfinancial noncorporate businesses.

Recently, the Board partnered up with FRED to simplify and enhance the use of these data in FRED. In the FRED graph above, we provide one way of visualizing these data: ratios of debt securities and loans to total assets for the nonfinancial corporate sector. These two ratios tell us how, and how much, the US nonfinancial corporate sector is financing their operations through leverage.*

The blue line is our debt security leverage ratio and the green line is our loan leverage ratio.

• From 1951 to 1990, both series generally moved together.
• From the 1990 recession to 2003, we see a shift away from loans toward debt securities.
• From 2003 to 2008, the loan leverage ratio was relatively constant while the debt leverage ratio decreased: Early in the 2008-09 recession, loans and debt securities were at similar levels. After that recession, we see another shift away from loans toward debt securities.
• During the pandemic, both series spiked as firms were forced to increase their levels of debt to endure reduced consumption.

*We use data from the “Balance Sheet of Nonfinancial Corporate Business” (B.103) release, which is part of the Board’s larger release, “Financial Accounts of the United States” (Z.1).

How this graph was created: Search FRED for and select “TABSNNCB.” Click “Edit Graph”: Use the “Customize” field to search for and select “NCBDBIQ027S” and add the series. Insert b/(1000*a) in the formula field. Use the “Add Line” tab to search for and select “TABSNNCB.” Then add series “NCBLL” and apply the same formula. Use the “Format” tab to change the line styles.

Suggested by Anna Cole and Julian Kozlowski.