Italian household debt after the 2008 crisis
AbstractAfter the crisis, from 2008 to 2010 the share of indebted households decreased both owing to a reduction in loan demand and stricter supply conditions. The reduction regarded mortgages and involved low-income households and the self-employed. Recourse to consumer credit remained stable; it increased for low-income households. Household debt sustainability, measured by debt as a proportion of income and assets, did not worsen; debt service for mortgages as a ratio of income decreased for low-income households. The percentage of vulnerable households i.e. those with a high debt service to income, remained unchanged from 2008 to 2010, when the sharp reduction in income was offset by a marked fall in interest rates; simulations for 2011-2012 show modest changes in this indicator. Over-indebted households i.e. those permanently unable to repay their debt, are estimated at 160,000 or 0.6 per cent of the total.
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Questioni di Economia e Finanza (Occasional Papers) with number 134.
Date of creation: Sep 2012
Date of revision:
household indebtedness; financial crises; vulnerability; over-indebtedness;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
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- C. Giannetti, 2014. "Time Preference Instability, Financial and Working Status," Working Papers wp924, Dipartimento Scienze Economiche, Universita' di Bologna.
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