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Households' indebtedness and financial fragility

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  • Jappelli Tullio
  • Pagano Marco
  • Di Maggio Marco

Abstract

The paper studies the determinants of international differences in household indebtedness, and inquires whether indebtedness is associated with increased "financial fragility", as measured by the sensitivity of household arrears and insolvencies to macroeconomic shocks. It also investigates whether financial fragility is affected by institutional factors, such as information sharing arrangements, judicial efficiency and individual bankruptcy regulation. We address these issues by tapping three data sets: (i) cross-country data on household indebtedness; (ii) European panel data for household lending and arrears; and (iii) time series data for household lending and insolvencies in the U.K., the U.S.A. and Germany. Overall, the analysis underscores the importance of institutional arrangements in determining the size and fragility of household credit markets.

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Bibliographic Info

Article provided by Società editrice il Mulino in its journal Journal of Financial Management, Markets and Institutions.

Volume (Year): (2013)
Issue (Month): 1 (January)
Pages: 26-35

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Handle: RePEc:mul:jdp901:doi:10.12831/73631:y:2013:i:1:p:26-35

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Related research

Keywords: Household Debt; Financial Fragility; Arrears; Insolvency; Bankruptcy Law (JEL Codes: D14; G21; G28; G33);

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References

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Citations

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Cited by:
  1. Mwanza Nkusu, 2011. "Nonperforming Loans and Macrofinancial Vulnerabilities in Advanced Economies," IMF Working Papers 11/161, International Monetary Fund.
  2. Alena Bicakova & Zuzana Prelcova & Renata Pasalicova, 2010. "Who Borrows and Who May Not Repay?," Working Papers 2010/10, Czech National Bank, Research Department.
  3. J. Michael Collins & John Karl Scholz & Ananth Seshadri, 2013. "The Assets and Liabilities of Cohorts: The Antecedents of Retirement Security," Working Papers wp296, University of Michigan, Michigan Retirement Research Center.
  4. Georgarakos, Dimitris & Lojschova, Adriana & Ward-Warmedinger, Melanie E., 2009. "Mortgage Indebtedness and Household Financial Distress," IZA Discussion Papers 4631, Institute for the Study of Labor (IZA).
  5. Laura Bartiloro & Cristiana Rampazzi, 2013. "Italian households’ saving and wealth during the crisis," Questioni di Economia e Finanza (Occasional Papers) 148, Bank of Italy, Economic Research and International Relations Area.
  6. Marianna Brunetti & Elena Giarda & Costanza Torricelli, 2012. "Is financial fragility a matter of illiquidity? An appraisal for Italian households," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 12061, Universita di Modena e Reggio Emilia, Facoltà di Economia "Marco Biagi".
  7. Barbara Cavalletti & Corrado Lagazio & Daniela Vandone & Elena Lagomarsino, 2012. "The role of financial position on consumer indebted-ness. An empirical analysis in Italy," DEP - series of economic working papers 8/2012, University of Genoa, Research Doctorate in Public Economics.
  8. Javier Gutiérrez Rueda & Dairo Estrada & Laura Capera, . "Un análisis del endeudamiento de los hogares," Temas de Estabilidad Financiera 061, Banco de la Republica de Colombia.
  9. Filippo Domma & Sabrina Giordano, 2012. "A stress–strength model with dependent variables to measure household financial fragility," Statistical Methods and Applications, Springer, vol. 21(3), pages 375-389, August.
  10. Maria Belén Zinni, 2013. "Identifying Drivers for the Accumulation of Household Financial Wealth," CEIS Research Paper 264, Tor Vergata University, CEIS, revised 13 Feb 2013.
  11. David ARISTEI & Manuela Gallo, 2012. "The Drivers of Household Over-Indebtedness and Delinquency on Mortgage Loans: Evidence from Italian Microdata," Quaderni del Dipartimento di Economia, Finanza e Statistica 105/2012, Università di Perugia, Dipartimento Economia, Finanza e Statistica.

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