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Two Dimensions of Combating Over-Indebtedness: Consumer protection and financial stability. ECRI Research Report No. 18, 28 October 2016

Bouyon, Sylvain and Musmeci, Roberto (2016) Two Dimensions of Combating Over-Indebtedness: Consumer protection and financial stability. ECRI Research Report No. 18, 28 October 2016. UNSPECIFIED.

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    Abstract

    The expansion of credit markets has fostered economic growth across the European Union, but it has also produced a sharp increase in the average level of household indebtedness. As a consequence of the financial crisis, the drop in households’ disposable income has undermined the ability of many EU households to honour their financial commitments. Against this background, this paper investigates the complexity of indebtedness and draws a distinction between its legal and economic dimensions in order to better understand the phenomenon. Despite efforts made by the European Commission, we found that the definition of indebtedness and over-indebtedness still lacks precision. Mirroring the interventions of national legislators in terms of consumer protection, over-indebtedness in the EU tends to be narrowly defined in terms of its relationship with insolvency. Therefore, further efforts need to be taken in designing the necessary measures to alleviate and prevent over-indebtedness. Accordingly, this study focuses on the role of financial education, analyses the impact of the relevant EU directives, collects important evidence in support of harmonising debt-advice services and explores the path towards a common methodology of early detection of vulnerable households.

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    Item Type: Other
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > general
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on/reforms/economic governance
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > ECRI Research Reports
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 31 Oct 2016 10:31
    Number of Pages: 20
    Last Modified: 31 Oct 2016 10:31
    URI: http://aei.pitt.edu/id/eprint/80601

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