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Household Borrowing and Monetary Policy Transmission: Post-Pandemic Insights from NineEuropean Credit Registers

Author

Listed:
  • Olivier De Jonghe

    (European Central Bank, National Bank of Belgium)

  • Konstantins Benkovskis

    (Latvijas Banka)

  • Karolis Bielskis

    (Lietuvos bankas, Lietuvos bankas)

  • Diana Bonfim

    (Banco de Portugal and Católica Lisbon)

  • Margherita Bottero

    (Banca d’Italia)

  • Tamas Briglevics

    (Central Bank of Hungary)

  • Martin Cesnak

    (National Bank of Slovakia)

  • Mantas Dirma

    (Lietuvos bankas)

  • Marina Emiris

    (National Bank of Belgium)

  • Palma Filep-Mosberger

    (Central Bank of Hungary)

  • Valentin Jouvanceau

    (Lietuvos bankas)

  • Nicholas Kaiser

    (Central Bank of Ireland)

  • Dmitry Khametshin

    (Banco de España)

  • Tibor Lalinsky

    (National Bank of Slovakia)

  • Viola M. Grolmusz

    (Central Bank of Hungary)

  • Laura Moretti

    (Central Bank of Ireland)

  • Arturs Janis Nikitins

    (Latvijas Banka)

  • Angelo Nunnari

    (Banca d’Italia)

  • Maria Rodriguez-Moreno

    (Banco de Espana)

  • Elitsa Stefanova

    (European Central Bank)

  • Lajos Tamas Szabo

    (Central Bank of Hungary)

  • Karlis Vilerts

    (Latvijas Banka)

  • Sujiao Emma Zhao

    (Banco de Portugal and Catolica Lisbon)

Abstract

We study heterogeneity in households’ credit across nine European countries (Belgium, Spain, Hungary, Ireland, Italy, Latvia, Lithuania, Portugal, and Slovakia) during 2022-2024 using granular credit register data. We first document substantial between- and within-country variation in mortgage and consumer lending by borrower age, loan maturity, and interest rate fixation. We then quantify the passthrough of the ECB’s recent tightening cycle to household borrowing costs, and assess its heterogeneous impact across households. Pass-through is nearly complete for mortgages (around 0.9) but considerably weaker for consumer credit (around 0.4). While mortgage pass-through is relatively homogeneous across countries, consumer credit shows pronounced cross-country differences that cannot be explained by borrower or loan characteristics. Younger households face stronger mortgage pass-through but weaker consumer credit pass-through relative to older borrowers, and longer maturities are associated with stronger pass-through in both credit markets.

Suggested Citation

  • Olivier De Jonghe & Konstantins Benkovskis & Karolis Bielskis & Diana Bonfim & Margherita Bottero & Tamas Briglevics & Martin Cesnak & Mantas Dirma & Marina Emiris & Palma Filep-Mosberger & Valentin J, 2025. "Household Borrowing and Monetary Policy Transmission: Post-Pandemic Insights from NineEuropean Credit Registers," Bank of Lithuania Working Paper Series 136, Bank of Lithuania.
    • Handle: RePEc:lie:wpaper:136
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    Keywords

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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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