Modelling householdsï¿½ financial vulnerability with consumer credit and mortgage renegotiations
Carmela Aurora Attinï¿½ (),
Francesco Franceschi () and
Valentina Michelangeli ()
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Carmela Aurora Attinï¿½: Bank of Italy
Francesco Franceschi: Bank of Italy
No 531, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area
Strong growth in consumer credit and widespread recourse to mortgage renegotiations observed since 2015 have affected householdsï¿½ ability to repay their loans. In this paper we explore a novel way of accounting for these trends, by extending the Bank of Italy microsimulation model of householdsï¿½ financial vulnerability. The extension provides a more accurate assessment of the financial stability risks stemming from the household sector. Consumer credit growth drives an increase in the share of vulnerable households, but has limited effects on the overall debt at risk. Mortgage renegotiations contribute to a decrease in householdsï¿½ vulnerability.
Keywords: vulnerability; consumer credit; mortgage renegotiations (search for similar items in EconPapers)
JEL-codes: C1 G2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-eur and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_531_19
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