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The effect of the financial crisis on default by Spanish households

Author

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  • Aller, Carlos
  • Grant, Charles

Abstract

We analyse the default behaviour of Spanish households immediately before and after the recent financial crisis. Using several waves of the Survey of Household Finances (a tri-annual survey of financial position of Spanish households), we show that younger, poorer and less well educated households are most likely to default. A key contribution is to explain the change in arrears since the onset of the crisis. Using information on credit applications and acceptances we decompose the change in arrears among all households into a contribution from four parts: (i) changes in characteristics; (ii) changes in applications; (iii) changes in acceptances; (iv) changes in arrears among borrowers. We show the last is the most important contribution.

Suggested Citation

  • Aller, Carlos & Grant, Charles, 2018. "The effect of the financial crisis on default by Spanish households," Journal of Financial Stability, Elsevier, vol. 36(C), pages 39-52.
  • Handle: RePEc:eee:finsta:v:36:y:2018:i:c:p:39-52
    DOI: 10.1016/j.jfs.2018.02.006
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    References listed on IDEAS

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    More about this item

    Keywords

    Spanish financial crisis; Household-debt; Arrears;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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