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Other ECRI Publications
Integrating Retail Financial Markets in Europe: Between Uncertainties & Challenges
CEPS Senior Fellow Rym Ayadi argues in her latest publication that European policy-makers ought to rethink their approach to financial market integration in order to continue the construction of the internal market for retail financial services. Urgent efforts should be taken to ensure financial safety for retail consumers and to enhance consumer protection at the EU level. To restore market and consumer confidence in retail financial services, she calls for the implementation of, European frameworks for financial safety, regulation and consumer protection.
The document can be downloaded here.
Consumer Bankruptcy and Credit Default in the US and Europe (2009), CEPS Working Document by Maria Gerhardt
Consumer insolvency is a topic that has gained much prominence in the context of the financial crisis on both sides of the Atlantic. The number of bankruptcy filings has soared in recent years, and is not expected to go down in the near future.
This CEPS Working Document explains the consumer bankruptcy procedures in the US and five European countries with quite different approaches: the UK, Ireland, Germany, France and Spain. Since there is no law on consumer insolvency in Italy, the situation in this country is outlined only briefly. When considering current statistics on consumer bankruptcies so far, the first effects of the economic crisis can be observed, so the question arises as to what is yet to come and which bankruptcy procedures are the most appropriate. After a short presentation of each insolvency procedure, the developments in national bankruptcy numbers are traced, highlighting striking developments in the different countries studied here.
The document can be downloaded here.
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Consumer financial vulnerability - the personal feeling of being in a financially unstable situation - is one of the early indicators of financial stress in households. A number of factors can lead to perceptions of vulnerability, such as a darkening economic outlook, expected wage cuts or an increasing risk of unemployment. This topic has been the focus of greater interest in
The European Credit Research Institute (ECRI) and the Personal Finance Research Centre (PFRC) have conducted research on the development and construction of a Consumer Financial Vulnerability Index. During the course of the study, the two research institutes worked together with expert institutions in each of the 10 European countries covered by the survey.
The Technical Report provides an in-depth description of the research methodology and approach taken to developing the index. It discusses the technical matters behind the new index and begins with a review of the literature (section II) that forms the general background for the Index, including a discussion of the latest research on household indebtedness, behavioural economics and consumer psychology as well as consumer finance and repayment problems. Section III presents an overview of existing indices, confirming that a similar index had not yet been calculated based on representative polling in the countries covered in this study. Section IV discusses the initial exploratory analysis of the survey data, which has informed the development of the Index. The aim of this discussion is to provide the greatest transparency possible for those parties interested in the technical aspects of how the index has been constructed (and for replication). In section V the final index construction methodology and the initial results of the index are presented.
The companion report, European Trends in Consumer Financial Vulnerability discusses the survey results and puts them into the context of general economic developments in the countries covered.
Technical Report (available upon request)
Applied Report (available upon request)
The Economics of Consumer Credit (2008), MIT Press, edited by Giuseppe Bertola, Richard Disney and Charles Grant. Contributors, among others, ECRI Head of Research Nicola Jentzsch.
Academic research and policy discussions of credit markets usually focus on borrowing by firms and producers rather than by households, which are typically analyzed in terms of their savings and portfolio choices. The Economics of Consumer Credit brings together leading international researchers to focus specifically on consumer debt, presenting current empirical and theoretical research crucial to ongoing policy debates on such topics as privacy rules, the regulation of contractual responsibilities, financial stability, and overindebtedness.
For more information, click here.
European Credit Research Institute (2006). Consumer Financial Capability: Empowering European Consumers, Papers from the First Consumer Financial Capability Workshop, Brussels.
The use of financial products by consumers has increased noticeably during the past years. This phenomenon has been discussed in a number of European Central Bank and International Monetary Fund publications. These changes may justify policy initiatives in the areas of consumer information, education and protection. ECRI aims at contributing to the debate in this area by setting up Consumer Financial Capability Workshops that offer specialists the opportunity to exchange ideas on the economic, social and regulatory issues of financial capability. The first paper, by Johanna Leskinen and Anu Raijas, prepares the ground by proposing a definition and conceptual framework for consumer financial capability. Catarina Frade and Claudia Lopes then provide an analysis of the psychological and social factors determining consumer financial capability. The paper by Elaine Kempson, Sharon Collard and Nick Moore deals with how to measure consumer financial capability based on an extensive UK survey run by the authors. Gianni Nicolini examines what aspects should be taken into account to strike the right regulatory balance between consumer information and consumer protection. Potential future legal and regulatory developments are further explored by Didier Noel. All the papers were presented during a workshop held in Brussels on 8 November 2005.
ECRI and Mercer Oliver Wyman (2005). Consumer credit in Europe: Riding the Wave.
Consumer credit is one of the fastest growing and most profitable sectors in European financial services. The market has grown by more than 7% a year for the last five years, reaching around EUR 19 BN in profits and EUR 900 BN of outstandings in 2004. The future is bright, too: annual profits are expected to climb to EUR 26 BN over the next half-decade. This report gives an overview over latest developments of the markets until 2005.
Commentary: The EU Commission amends its Proposed Consumer Credit Directive, by Almudena de la Mata Munoz, CEPS/ECRI Research Fellow, published: European Voice, December 2004/January 2005
Commentary: The EU Commission publishes on 28 October the amended version of the Consumer Credit Directive, by Almudena de la Mata Munoz, CEPS/ECRI Research Fellow, January 2005
Commentary: Two steps further in the Consumer Credit Directive Procedure, by Almudena de la Mata Munoz, CEPS/ECRI Research Fellow, July 2004
Commentary for CEPS: Developments in the Consumer Credit Directive, by Almudena de la Mata Munoz, CEPS/ECRI Research Fellow, December 2004
Lannoo, K. and Mata Munoz, A. (2004). Integration of the EU Consumer Credit Market. Proposal for a More Efficient Regulatory Model, CEPS Working Documents, November 2004
This paper argues that the achievement of a single consumer credit market in the EU requires the harmonisation of national laws on consumer credit. It also presents the key changes that must be introduced into the EU regulatory process to accomplish the legal harmonisation needed for an integrated consumer credit market in the longer term. The use of comitology procedures for regulation in the field of consumer credit could introduce a high level of flexibility and the capacity to react quickly to market needs. As member states could contribute actively to the legislative process, an increasing level of legal harmonisation would thus be more easily achieved.
Commentary: Waiting for the EU Commission's amended proposal, by Almudena de la Mata Munoz, CEPS/ECRI Research Fellow, October 2004
