Debt Stress and Debt Illusion: The Role of Consumer Credit, Reverse and Standard Mortgages

2020 ◽  
Author(s):  
Donald R. Haurin ◽  
Stephanie Moulton ◽  
Cäzilia Loibl ◽  
Julia Brown
Keyword(s):  
Consumer Credit ◽  
Debt Stress

scholarly journals Funding Self-Employment: The Role of Consumer Credit

2011 ◽  
Author(s):  
Christoph Kneiding ◽  
Alexander S. Kritikos
Keyword(s):  
Consumer Credit ◽  
Self Employment

The Political Economy of Easy Credit Policies

2016 ◽  
pp. 84
Author(s):  
Karim Azizi ◽  
Thibault Darcillon
Keyword(s):  
Political Economy ◽  
Low Income ◽  
Recent Literature ◽  
Consumer Credit ◽  
Majority Voting ◽  
The Political ◽  
Aggregate Consumption ◽  
The Past ◽  
Marginal Effects

During the past thirty years, U.S. economic growth has disproportionately benefited the richest percentiles of the American population, i.e., the top income earners. Although this phenomenon is difficult to explain from a “standard” political economy perspective (i.e., majority voting), recent literature emphasizes the role of consumer credit as a means of circumventing costly public redistribution. According to this theory, most OECD and, notably, American policymakers should have facilitated middleclass and low-income households’ access to consumer credit to cushion the effects of increased income inequality (i.e., an increased share of GDP held by top earners). Our contribution to this literature is to argue that increases in inequality (as measured by expansions in the share of GDP held by top income earners) should be associated with aggregate consumption increases. Indeed, in response to increased inequality, easy credit policies stimulate low-income and middle-class consumption, which contributes to an increased aggregate consumption level. Using a panel dataset of 20 developed OECD economies between 1980 and 2007, we show that such increases in inequality are actually associated with expansions of aggregate consumption. Finally, when computing marginal effects, we conclude that these expansions increase with the size of the financial sector.

Kueski: Revolutionizing Consumer Credit in Mexico

2017 ◽  
pp. 1-10
Author(s):  
Sarit Markovich ◽  
Nilima Achwal
Keyword(s):  
Financial Market ◽  
Financial Services ◽  
Scoring System ◽  
Credit Card ◽  
Consumer Credit ◽  
Credit Scoring ◽  
Loan Approval

This case asks students to step into the role of Adalberto Flores, co-founder and CEO of Kueski, one of the first companies to develop a proprietary algorithm for online loan approval in Mexico. Mexico lacks a standardized credit scoring system, making it difficult for many Mexicans to get approved for a loan or credit card. This, together with the fact that Mexicans generally do not trust traditional banks, makes Mexico an attractive opportunity for fintech companies. Growth, however, could require fintech companies to partner with traditional banks. Students assume the role of Flores to think about the benefits and risks associated with a partnership between Kueski and traditional banks. Students are also challenged to compare the structure of U.S. financial services markets with the Mexican structure and consider the implications on the sustainability of fintech companies in the two markets. The teaching note analyzes the Mexican financial market and the benefits and threats it holds for fintech companies, and outlines a framework for evaluating the risk associated with partnerships.

A Sisyphean Task

2018 ◽  
pp. 72-92
Author(s):  
Stuart Aveyard ◽  
Paul Corthorn ◽  
Sean O’Connell
Keyword(s):  
Monetary Policy ◽  
Consumer Protection ◽  
Consumer Credit ◽  
Strong Impact ◽  
Cooperative Movement ◽  
Consumer Durable ◽  
Affluent Society ◽  
The Impact

Chapter 3 examines debates about controls on consumer credit from late 1957 to 1964. As in Chapter 2, this chapter provides a fresh appraisal of Labour’s response to the affluent society. The party attempted to outflank the Conservatives on the issue of consumer protection. It embarrassed the Conservatives over their sluggish response to the Molony Committee’s recommendations on hire purchase legislation. The chapter also supports previous analyses that have identified the strong impact of new consumerist groups, particularly the Consumers’ Association and the weakening role of the Cooperative Movement. The issue of credit controls became more contentious. The Radcliffe Committee on monetary policy (1958) highlighted the weaknesses of the system. Of particular concern was the impact of controls on consumer durable industries. They were removed in 1958, but reintroduced, in 1960, following a dangerous rise in consumer indebtedness.

Debt and credit in Bath's court of requests, 1829–39

Urban History ◽  
1994 ◽  
Vol 21 (2) ◽  
pp. 211-236 ◽  
Author(s):  
Margot Finn
Keyword(s):  
Eighteenth Century ◽  
Financial Crises ◽  
Trade Credit ◽  
Consumer Credit ◽  
Economic Life ◽  
Transport Mechanisms ◽  
Victorian Period ◽  
Private Credit ◽  
Master Builders

Historians have long recognized the central role of debt and credit for producers, retailers and consumers in the later eighteenth and early nineteenth centuries. Against a background characterized by persistent shortages of specie, limited banking facilities and erratic transport mechanisms, the speculative impulse that fed the expanding economy drew sustenance from a proliferation of instruments of private credit — notably bills of exchange, promissory notes, and accommodation bills — which, together with an increase of trade credit to retailers and their customers, served to promote and intertwine the industrial, commercial and consumer revolutions. ‘At any one time any business owed and was owed many goods caught up in the process of exchange’, Julian Hoppit observes of the later decades of the eighteenth century. ‘All businessmen were creditors and all businessmen were debtors.’ As trade and manufacture increased in English towns and cities, extended chains of indebtedness multiplied the economic links both between individual producers, retailers or consumers and among these sectors of the economy. Thus in Lancashire innkeepers were the debtors of maltsters, brewers and wine merchants, but were the creditors of shopkeepers, who in turn extended webs of consumer credit to sawyers and carpenters, artisans typically indebted (in their capacity as producers) to the master builders for whom they laboured in Liverpool's shipyards. Based on personal faith rather than tangible securities, these varied forms of private credit were notoriously unstable. Broad-based financial crises fuelled by the failure of private credit became commonplace in the last three decades of the century, and persistently disrupted economic life into the Victorian period.

scholarly journals Affluence and unsustainable consumption levels: The role of consumer credit

2020 ◽  
Vol 1 ◽  
pp. 100003
Author(s):  
Richard Ahlström ◽  
Tommy Gärling ◽  
John Thøgersen
Keyword(s):  
Consumer Credit

scholarly journals Requirements for Intermediaries and Advisors in the Area of Mortgages Resulting from Mortgage Credit Directive– Implications for Poland

e-Finanse ◽  
2015 ◽  
Vol 11 (2) ◽  
pp. 18-31
Author(s):  
Krzysztof Waliszewski
Keyword(s):  
Consumer Credit ◽  
Credit Market ◽  
Mortgage Lending ◽  
Mortgage Market ◽  
Legislative Process ◽  
Mortgage Credit ◽  
Current Financial Crisis ◽  
Polish Law ◽  
Mortgage Credit Directive

Abstract The dynamic development of the mortgage market, especially in the period before the current financial crisis, revealed that within the EU there are local mortgage credit markets and that it is necessary to harmonize the rules of the system and consumer protection within the Community. The intention of the creators of the Mortgage Credit Directive was to organize the mortgage lending market for residential purposes and make it transparent, as well as increase the safety of the consumer credit market, along the lines of what took place earlier in the consumer credit market regulations (The Consumer Credit Directives no. 2008/48/EC and earlier no. 87/102/EEC). The Mortgage Credit Directive implies for lenders - credit institutions to act at every stage of the lending process with respect to the consumer’s interest and to provide them with adequate services for their needs. Due to the large role of indirect distribution channels of mortgages by banks there are certain requirements for intermediaries, brokers and credit advisors. The implementation term of the Directive, appointed for March 2016, implies action to be taken in order to implement the provisions of this Directive into Polish law. The legislative process is being conducted by the Ministry of Finance and supported by the Group on implementation of the Mortgage Credit Directive operating with the Council of Financial Market Development.

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