Household loan loss risk in Finland – estimations and simulations with micro data
AbstractThis discussion paper presents a microsimulation model of household distress. We use logit analysis to estimate the extent to which a household’s risk of being financially distressed depends on net income after tax and loan servicing costs. The impact of assumed macroeconomic shocks on this net income concept is calculated at the household level. The microsimulation model is used to simulate both the number of distressed households and their aggregate debt in various macroeconomic scenarios. The simulations indicate that household credit risks to banks are relatively well contained.
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Bibliographic InfoPaper provided by Bank of Finland in its series Research Discussion Papers with number 5/2007.
Length: 44 pages
Date of creation: 08 May 2007
Date of revision:
financial stability; indebtedness; micro simulations; households;
Find related papers by JEL classification:
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- R29 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-12 (All new papers)
- NEP-BAN-2007-05-12 (Banking)
- NEP-CMP-2007-05-12 (Computational Economics)
- NEP-EEC-2007-05-12 (European Economics)
- NEP-MAC-2007-05-12 (Macroeconomics)
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