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Size and dynamics of debt positions in Belgium and in the euro area

Author

Listed:
  • A. Bruggeman

    (National Bank of Belgium, Research Department)

  • Ch. Van Nieuwenhuyze

    (National Bank of Belgium, Research Department)

Abstract

The current financial crisis has once again shown that the inherent pro-cyclicality of lending can trigger financial cycles with a potentially substantial impact on the real economy. Against that background, the article analyses the size and dynamics of the debt ratios of the various non-financial sectors in Belgium and in the euro area. This reveals wide differences between countries, particularly in regard to the size, dynamics and composition of the debt positions. Next, the sustainability of those debt positions is assessed on the basis of a number of key indicators to identify those countries and sectors where balance sheet repair is most needed. Finally, the authors examine to what extent the deleveraging process has already begun, and the role performed in that by demand and supply factors affecting lending.

Suggested Citation

  • A. Bruggeman & Ch. Van Nieuwenhuyze, 2013. "Size and dynamics of debt positions in Belgium and in the euro area," Economic Review, National Bank of Belgium, issue i, pages 57-77, June.
    • Handle: RePEc:nbb:ecrart:y:2013:m:june:i:i:p:57-77
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    References listed on IDEAS

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    1. Cathcart, Lara & Dufour, Alfonso & Rossi, Ludovico & Varotto, Simone, 2020. "The differential impact of leverage on the default risk of small and large firms," Journal of Corporate Finance, Elsevier, vol. 60(C).

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    More about this item

    Keywords

    financial cycle; balance sheet recession; indebtedness; debt sustainability; deleveraging;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G01 - Financial Economics - - General - - - Financial Crises

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