Households' Risks from a Danish Financial Stability Perspective Tue Mathiasen Danmarks Nationalbank Agenda Aspects of the latest period of growth and recession Households’ debt and wealth Households’
Download ReportTranscript Households' Risks from a Danish Financial Stability Perspective Tue Mathiasen Danmarks Nationalbank Agenda Aspects of the latest period of growth and recession Households’ debt and wealth Households’
Households' Risks from a Danish Financial Stability Perspective Tue Mathiasen Danmarks Nationalbank
Agenda
Aspects of the latest period of growth and recession Households’ debt and wealth financial non-financial Households’ debt service issues at the macro level at the micro level Way forward 25-04-2020 DANMARKS NATIONALBANK 2
Growth and recession - net borrowing / net lending Pct .
0 -2 -4 -6 -8 10 8 6 4 2
Net borrow ing / net lending (Pct . of GDP - 4 qrt . avg.)
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Non-financial corporations Households and NPISH Financial corporations Rest of the w orld General government 25-04-2020 DANMARKS NATIONALBANK 3
Growth and recession - Changes in household balances 25-04-2020 DANMARKS NATIONALBANK 4
Households’ debt and wealth - Real economy spill-over Pct .
300 250 200 Index 15 10 5 150 100 50 0 -5 -10 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -15 Net f inancial wealt h (pct . of disp. income) Consumer conf idence (right ) 25-04-2020 DANMARKS NATIONALBANK 5
Households’ debt and wealth - Real economy spill-over Pct .
15 10 5 0 -5 -10 -15
Households' net borrow ing / net lending, real invest m ent s and savings (Pct . of disp. incom e - 4 qrt . avg.)
4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2004 2005 2006 2007 2008 2009 2010 2011 Net borrow ing / net lending Real investments Savings 25-04-2020 DANMARKS NATIONALBANK 6
Households’ debt and wealth - Financial wealth Pct .
Households' f inancial net w ealt h (Pct . of disp. incom e - 4 qrt . avg.)
1000 800 600 400 200 0 -200 -400 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Financial net w ealth Financial assets Liabilities 25-04-2020 DANMARKS NATIONALBANK 7
Households’ debt and wealth - Total wealth Pct .
1000 800 600 400 200 0 -200 -400
Households' f inancial and t ot al net w ealt h (Pct . of disp. incom e - 4 qrt . avg.)
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Financial net w ealth Liabilities Financial assets Residential property, gross value Total assets 25-04-2020 DANMARKS NATIONALBANK 8
Households’ debt and wealth - Property estimations Lack of official statistics High quality data sources Register of all Danish property (buildings and land) Continuous valuation of all Danish property for tax purposes Property price statistics By Statistics Denmark Property price index By Association of Danish Mortgage Banks Quarterly data on average square metre prices from open market transactions 25-04-2020 DANMARKS NATIONALBANK 9
Households’ debt and wealth - Property estimations (cont.) Estimations within Danish NCB Method Combination of stock (register data) by owner sector and transaction prices (mortgage bank info.) Stratification by groups of municipalities with similar degrees of urbanisation Possibility of selection bias (actual traded property) Not a full usage of all available high quality data sources 25-04-2020 DANMARKS NATIONALBANK 10
Households’ debt and wealth - Across Nordic countries 25-04-2020 DANMARKS NATIONALBANK 11
Households’ debt and wealth - Gross debt 25-04-2020 DANMARKS NATIONALBANK 12
Households’ debt service issues - macro level Kr. billion 1.800
1.500
1.200
900
Debt service, housing loans
Kr. billion 30 25 20 15 600 300 0 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 Housing loans, balance Repayments (right) Interest payments (right) Debt service, housing loans (right) 10 5 25-04-2020 DANMARKS NATIONALBANK 13
Households’ debt service issues - composition of mortgage-credit 25-04-2020 DANMARKS NATIONALBANK 14
Households’ debt service issues - composition by mortgaging ratio 25-04-2020 DANMARKS NATIONALBANK 15
Households’ debt service issues - composition by income 25-04-2020 DANMARKS NATIONALBANK 16
Households’ debt service issues -exposure to interest rate changes 25-04-2020 DANMARKS NATIONALBANK 17
Way forward
In general, a growing demand for official statistics supporting financial stability analysis Examples of specific issues Real property Micro-macro link 25-04-2020 DANMARKS NATIONALBANK 18