Wait and see -BIS on Household Debt

verfasst von Popeye, 26.04.2004, 11:30

-->BIS on: Household debt and the macroeconomy


….In most developed countries, the growth in household debt over the past two
decades has exceeded that of income. However, the timing, extent and rate of
the increase have varied considerably across countries. As shown in Graph 1,
household indebtedness rose substantially in the 1980s in France, Japan and
the United Kingdom, and in the 1990s in Australia and the Netherlands. The
graph also shows considerable variation across countries.

….In every country, the bulk of the increase in household debt has been in
the form of borrowing for housing. For example, such borrowing currently
accounts for around 75% of total household debt in the United States and the
United Kingdom and around 60% in France and Germany, while in Australia it
accounts for 85%…..

…..The largest and most significant negative shock to household income is
unemployment. Greater household indebtedness and higher debt service levels
will heighten the sensitivity of households to a rise in unemployment, amplifying
the effect of a negative shock to the economy……
I

Even in the absence of a downturn, increased indebtedness means that the
household sector is more exposed to falls in house prices that result in
negative equity…..

……Changes in interest rates will generally affect a much greater number of
households than a rise in unemployment…..

Predominant type of household mortgage interest rate
Australia Variable
Italy Mixed
Austria Fixed
Japan Mixed
Belgium Fixed
Netherlands Fixed
Canada Fixed
Norway Variable
Denmark Fixed
Portugal Variable
Finland Variable
Spain Variable
France Fixed
Sweden Variable
Germany Fixed
Switzerland Variable
Greece Variable
United Kingdom Variable
Ireland Variable
United States Fixed
Sources: Borio (1995), based on majority of the stock of mortgages; ECB (2003). Table 1


…..While there may be no change in the impact on households of an upward
shift in interest rates, the effect on lending institutions may be more
pronounced, particularly if it comes after a period during which a large number
of households have refinanced at lower interest rates. Financial institutions will
be faced with higher funding costs but, with the bulk of their assets earning
fixed rates, will not experience a rise in the return on these assets as interest
rates rise. However, the greater securitisation of housing mortgages means
that financial institutions may also be shielded from the increase. The end
holders of the securitised product, which are generally pension funds, may thus
be most exposed to the risk (IMF (2003)). The household sector still ultimately
bears the risk, but as it is transmitted through changes in the value of
pensions, there is likely to be a much more gradual adjustment in consumption.
Hence the macroeconomic effect is likely to be smaller and/or more protracted
than if the household is bearing the interest rate risk directly.

Quelle:
<ul> ~ http://www.bis.org/publ/qtrpdf/r_qt0403e.pdf</ul>

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gesamter Thread:

• GB: Crash in house prices"unlikely" - trotz steigender Zinsen (Brown statement) - dottore, 26.04.2004, 10:29
  • Glaube eine Geschichte erst, wenn sie offiziell dementiert wird... - Tofir, 26.04.2004, 10:48
  • Wait and see -BIS on Household Debt - Popeye, 26.04.2004, 11:30
    • Re: Wait and see -BIS on Household Debt - dottore, 26.04.2004, 13:01
      • Die UBS zum Thema Inflation - chiron, 26.04.2004, 14:31
        • Nix verstehn... - chiron, 26.04.2004, 14:49
          • Re: Nix verstehn... - CRASH_GURU, 26.04.2004, 18:06
            • Re: Das ist ja einmalig! Woher hast Du die Info? Danke! - Per_Jakobsson, 26.04.2004, 20:59