Measuring over-indebtedness Measuring over-indebtedness EU - - PowerPoint PPT Presentation

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Measuring over-indebtedness Measuring over-indebtedness EU - - PowerPoint PPT Presentation

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Measuring over-indebtedness Measuring over-indebtedness EU indicators Brussels, December 12, 2014 A lot of information available Various institutions Eurostat European Central Bank Eurobarometer World Bank Ad-hoc

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SLIDE 1

Measuring over-indebtedness

Brussels, December 12, 2014

Measuring over-indebtedness EU indicators

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A lot of information available

  • Various institutions

– Eurostat – European Central Bank – Eurobarometer – World Bank

  • Ad-hoc modules/regular data collection

– Eurostat OID module in 2008 – Eurostat SILC indicators - annually – ECB Household Finance and Consumption Survey – bi-annually

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A variety of indicators already collected

  • Macro-economic level and micro/household level

– Gross household debt relative to income – Debt service to income ratio per household

  • Objective/subjective measures
  • Objective/subjective measures

– Indicators of the amount of debt relative to income or assets – Perceptions of debt burden

  • Cross-sectional and longitudinal data

– Multiple countries, data series

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SLIDE 4

Map of indicators

Eurostat World Bank Macroeconomic level Gross debt-to- income ratio of households Non-performing loans Eurostat ECB HFCS Eurobarometer SILC module Household-level Objective Presence of arrears Debt-to- disposable income or assets Subjective Debt burden At risk of over- indebtedness

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Map of indicators

Eurostat World Bank Macroeconomic level Gross debt-to- income ratio of households Non-performing loans Eurostat SILC module ECB HFCS Eurobarometer SILC module Household-level Objective Presence of arrears Debt-to- disposable income or assets Subjective Debt burden At risk of over- indebtedness

  • arrears on mortgage or

rent

  • arrears on hire-purchase
  • r other loans
  • arrears on utility bills
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SLIDE 6

Map of indicators

Eurostat World Bank Macroeconomic level Gross debt-to- income ratio of households Non-performing loans Eurostat SILC module ECB HFCS Eurobarometer Household-level Objective Presence of arrears Debt-to- disposable income or assets Subjective Debt burden At risk of over- indebtedness

  • financial burden of housing cost
  • financial burden of the repayment
  • f debts from hire purchases or

loans

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SLIDE 7

Map of indicators

Eurostat World Bank Macroeconomic level Gross debt-to- income ratio of households Non-performing loans Eurostat SILC module ECB HFCS Eurobarometer Household-level Objective Presence of arrears Debt-to-income

  • r assets

Subjective Debt burden At risk of over- indebtedness

  • debt to income ratio
  • debt service to

income ratio

  • debt to asset ratio
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SLIDE 8

Data limitations

  • Several databases, impossible to carry out in-depth analysis of

all indicators

  • Some data cover only selected countries
  • Mixture of measures related to credit and non-credit

commitments

  • Incomplete set of measures to assess credit-related over-

indebtedness

  • Plenty of data, but only statistical analysis
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SLIDE 9

Map of indicators

Eurostat World Bank Macroeconomic level Gross debt-to- income ratio of households Non-performing loans Eurostat SILC module ECB HFCS Eurobarometer Household-level Objective Presence of arrears Debt-to- disposable income or assets Subjective Debt burden At risk of over- indebtedness

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SLIDE 10

Data limitations

  • Several databases, impossible to carry out in-depth analysis of

all indicators

  • Some data cover only selected countries
  • Mixture of measures related to credit and non-credit

commitments

  • Incomplete set of measures to assess credit-related over-

indebtedness

  • Plenty of data, but only statistical analysis
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SLIDE 11

Data limitations

Eurostat World Bank Macroeconomic level Gross debt-to- income ratio of households Non-performing loans Eurostat SILC module ECB HFCS Eurobarometer Household-level Objective Presence of arrears Debt-to- disposable income or assets Subjective Debt burden At risk of over- indebtedness

  • nly Euro area

countries

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SLIDE 12

Data limitations

  • Several databases, impossible to carry out in-depth analysis of

all indicators

  • Some data cover only selected countries
  • Mixture of measures related to credit and non-credit

commitments

  • Incomplete set of measures to assess credit-related over-

indebtedness

  • Plenty of data, but only statistical analysis
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SLIDE 13

Data limitations

Eurostat World Bank Macroeconomic level Gross debt-to- income ratio of households Non-performing loans Eurostat ECB HFCS Eurobarometer

  • arrears on mortgage or

rent

SILC module Household-level Objective Presence of arrears Debt-to- disposable income or assets Subjective Debt burden At risk of over- indebtedness

  • arrears on hire-purchase
  • r other loans
  • arrears on utility bills
  • financial burden of housing cost
  • financial burden of the repayment
  • f debts from hire purchases or

loans

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SLIDE 14

Data limitations

  • Several databases, impossible to carry out in-depth analysis of

all indicators

  • Some data cover only selected countries
  • Mixture of measures related to credit and non-credit

commitments

  • Incomplete set of measures to assess credit-related over-

indebtedness

  • Plenty of data, but only statistical analysis
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SLIDE 15

Data limitations

Eurostat World Bank Macroeconomic level Gross debt-to- income ratio of households Non-performing loans Eurostat SILC module ECB HFCS Eurobarometer Household- level Objective Presence of arrears Debt-to- disposable income or assets Subjective Debt burden At risk of over- indebtedness

  • arrears on mortgage or

rent

  • arrears on hire-purchase
  • r other loans
  • arrears on utility bills
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SLIDE 16

Data limitations

  • Several databases, impossible to carry out in-depth analysis of

all indicators

  • Some data cover only selected countries
  • Mixture of measures related to credit and non-credit

commitments

  • Incomplete set of measures to assess credit-related over-

indebtedness

  • Plenty of data, but only statistical analysis
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SLIDE 17

Ways forward

  • Separate credit-related measures from unpaid dues on other

commitments (rent, bills)

  • Credit related measures:

– add indicators on credit use (mortgage, hire purchase, consumer, business loans, credit/store card) business loans, credit/store card) – Add the indicator on all credit arrears - mortgage, hire-purchase and other loans – add indicator on financial debt burden of repayment of all credits - mortgage, hire purchase debts or other loans

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Ways forward

  • Conduct more analysis, data mining of the existing data
  • Collect lead indicators through one data collection engine
  • Develop Debt Watch mechanism for monitoring over-

indebtedness

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Microfinance Centre

  • ul. Noakowskiego 10/38

00-666 Warsaw, Poland

Thank you!

Tel/fax.+48 22 622 34 65 microfinance@mfc.org.pl www.mfc.org.pl

Thank you!