The expansion of consumer credit in Italy and in the Euro Area: what are the drivers and the risks?

Silvia Magri (silvia.magri@bancaditalia.it), Valentina Michelangeli, Sabrina Pastorelli and Raffaella Pico (raffaella.pico@bancaditalia.it)
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Silvia Magri: Bank of Italy
Raffaella Pico: Bank of Italy

No 500, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Since 2015 consumer loans have been rising fast in France, Germany, Italy, and Spain. Credit demand, specifically for consumer durables, has played a crucial role; the easing of supply conditions has been relevant only in Italy and Spain, which experienced stronger credit tightening during the past crises. Risks stemming from the growth of consumer credit are mitigated by its lower incidence, compared with mortgages, on households� total debt and income; exposure to interest rate risk is also decreasing due to the high share of fixed-rate contracts. There is wide risk heterogeneity across countries, with Italy and Spain having the highest share of delinquent households (even for less than 90 days). In Italy, however, debt is increasingly concentrated among more affluent households, which are better able to withstand negative economic shocks; this trend is sustaining the drop in the ratio of new non-performing consumer loans.

Keywords: consumer loans; credit demand and supply; non-performing loans (search for similar items in EconPapers)
JEL-codes: D12 D91 E32 G21 I32 (search for similar items in EconPapers)
Date: 2019-06
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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