Mortgage arrears in Europe: The impact of monetary and macroprudential policies
Petra Gerlach-Kristen () and
Sean Lyons ()
No 2015-05, Working Papers from Swiss National Bank
Mortgage arrears arise if a household faces affordability problems and/or is in negative equity. Because widespread arrears pose a risk to the stability of banks and limit households' future access to credit, a crucial question is how monetary or macroprudential policies influence their incidence. We use a European household data set to analyse what drives arrears and find that affordability problems, such as unemployment, low income and high mortgage payments, matter, which suggests that monetary policy has an impact. Households facing the dual trigger of affordability problems and negative equity are more likely to go into longer-term arrears; macroprudential regulation preventing high loan-to-value (LTV) ratios can thus also have an impact.
Keywords: Arrears; negative equity; monetary policy; loan-to-value ratios (search for similar items in EconPapers)
JEL-codes: D14 E58 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-eur, nep-mac, nep-mon and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
https://www.snb.ch/n/mmr/reference/working_paper_2 ... _paper_2015_05.n.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:snb:snbwpa:2015-05
Access Statistics for this paper
More papers in Working Papers from Swiss National Bank Contact information at EDIRC.
Bibliographic data for series maintained by Enzo Rossi ().