Household over-indebtedness: Drivers and remedies

The ratio of EU household debt to disposable income rose in 2017. Albeit small, this increase was the first noted in six years. In that context, several observers are already warning of a possible upward risk of household over-indebtedness in the coming years. While it is too early to assess if this risk will materialise, a review of the effectiveness of existing rules aimed at tackling the issue should give us a better understanding of whether further policy actions are needed.

The European Commission recently launched a revision of the Consumer Credit Directive (CCD) and will soon review the Mortgage Credit Directive (MCD). Such policies have been designed with the aim of lessening the risk of household over-indebtedness. Other rules, however, might have a stronger effect. A first step to achieving the right policy mix is a well-founded assessment of the main drivers behind over-indebtedness.

The purpose of this event is to focus attention on three drivers in particular: unexpected income shocks, financial illiteracy and the lack of relevant data on creditworthiness. Expert panellists will focus on each of these three factors, with the aim of answering the following questions:

· How and to what extent does each driver raise household over-indebtedness?

· What are the related good and bad practices?

· Should regulators and supervisors intervene, and if so, at what stage in the process?

These issues will be debated with senior practitioners, distinguished academics, high-level officials and influential representatives from consumer associations.

Click here to register to this event and here for the agenda.