The Distribution of Debt Across Euro Area Countries: The Role of Individual Characteristics, Institutions and Credit Conditions

• DOI: 10.2139/ssrn.2369898
• Publication Date: 2013-12-25T16:01:32Z
• Authors: Olympia Bover; Jose Maria Casado; Sonia Costa; Philip Du Caju; Yvonne McCarthy; Eva Sierminska; Panagiota Tzamourani; Ernesto Villanueva; Tibor Zavadil
• Keywords: Debt service ratio; Household debt; Consumption; Survey data collection

The aim of this paper is twofold. First, we present an up-to-date assessment the differences across euro area countries in distributions various measures debt conditional on household characteristics. We consider three different outcomes: probability holding debt, amount held and, case secured interest rate paid main mortgage. Second, examine role legal and economic institutions accounting for these differences. use data from first wave a new survey finances, Household Finance Consumption Survey, to achieve aims. find that patterns unsecured outcomes vary markedly countries. Among all considered, length asset repossession periods best accounts features distribution debt. In with longer periods, fraction people who borrow smaller, youngest group households lower amounts (conditional borrowing), mortgage rates by low-income are higher. Regulatory loan-to-value ratios, taxation mortgages prevalence interest-only or fixed-rate deliver less robust results.