Analysing financial vulnerability by income group

Paolo Acciari, Elisabetta Manzoli (), Sauro Mocetti and Eliana Viviano
Additional contact information
Elisabetta Manzoli: Bank of Italy

No 222, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: In this paper we examine credit market participation and financial vulnerability by income, making use of a large sample of individuals aged 25-54. From 2005 to 2011 the percentage of individuals with more than �75,000 of debt increased, mainly as a result of slower debt repayment. Developments differed across income classes: the new borrowers were mainly concentrated in higher income classes, while the slowdown in debt repayment was more pronounced for the middle and lower income groups. During the period debt-servicing difficulties also increased: the delinquency rate in the poorest quintile of the population was 10 times higher than that in the richest quintile. This gap widened further in the wake of the global financial crisis. Our estimates show that income instability significantly increased the prevalence of financial distress. However, the high concentration of debt in the richest income classes helped to mitigate banks� overall risk.

Keywords: household debt; income; delinquency (search for similar items in EconPapers)
JEL-codes: D1 G21 (search for similar items in EconPapers)
Date: 2014-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bancaditalia.it/pubblicazioni/qef/2014-0222/222.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_222_14

Access Statistics for this paper

More papers in Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().