TY - JOUR
T1 - How financially vulnerable are CESEE households? An Austrian perspective on its neighbors
AU - Fessler, Pirmin
AU - List, Emanuel
AU - Messner, Teresa
PY - 2017
Y1 - 2017
N2 - {We employ newly available microdata to analyze household indebtedness and financial vulnerability in selected CESEE countries. The new 2014/15 wave of the Household Finance and Consumption Survey (HFCS) covers Slovenia, Estonia, Hungary, Latvia, Poland and Slovakia. Austrian banks have significant exposure to households in many CESEE countries, and the number of nonperforming loans is rather high in some of them. Our goal is to provide a clear picture of household vulnerability and its potential impact on financial stability and thus to allow for thinking in evidence-based scenarios. We focus on the joint distribution of debt and collateral and add several measures of financial vulnerability, such as loan-to-value, debt-to-income and debt service-to-income ratios. In addition, we employ econometric methods from the decomposition and policy evaluation literature to decompose differences in vulnerability measures between countries into two parts: one that is attributable to different borrower characteristics and another that is down to other external factors, such as differences in banks’ behavior across countries. Our results show that households are particularly vulnerable in Latvia and Hungary and that variations in household composition have different effects on vulnerability across the countries covered.
AB - {We employ newly available microdata to analyze household indebtedness and financial vulnerability in selected CESEE countries. The new 2014/15 wave of the Household Finance and Consumption Survey (HFCS) covers Slovenia, Estonia, Hungary, Latvia, Poland and Slovakia. Austrian banks have significant exposure to households in many CESEE countries, and the number of nonperforming loans is rather high in some of them. Our goal is to provide a clear picture of household vulnerability and its potential impact on financial stability and thus to allow for thinking in evidence-based scenarios. We focus on the joint distribution of debt and collateral and add several measures of financial vulnerability, such as loan-to-value, debt-to-income and debt service-to-income ratios. In addition, we employ econometric methods from the decomposition and policy evaluation literature to decompose differences in vulnerability measures between countries into two parts: one that is attributable to different borrower characteristics and another that is down to other external factors, such as differences in banks’ behavior across countries. Our results show that households are particularly vulnerable in Latvia and Hungary and that variations in household composition have different effects on vulnerability across the countries covered.
UR - https://ideas.repec.org/a/onb/oenbfi/y2017i2b1.html
M3 - Journal article
SN - 2310-5291
JO - Focus on European Economic Integration
JF - Focus on European Economic Integration
IS - 2
ER -