As each of the seven largest credit-card issuers in the US reported a troubling jump in default rates to levels not seen in the better part of a decade, we noted last week that relaxed lending standards combined with 'Non-GAAP' FICO scores suggest that the American consumer is in far worse shape than many had realized - which could seriously threaten stability during the next recession (if the Fed ever allows one to happen).

But as analysts dug into the implications of this trend for the ABS market, Barclays' securitized credit strategist Alin Florea told the bank's clients not to worry about the trend, because credit-card-backed ABS is protected by issuers stuffing these securities with only the highest quality borrowers.