February 23, 2012
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February 23, 2012
Household Insolvency in Canada
With increasing levels of household debt in recent years, the number of households that may be vulnerable to a negative economic shock is rising as well. Decisions made by both the debtor and the creditor can contribute to insolvency. This article presents some stylized facts about insolvency in Canada’s household sector and analyzes the role of creditors in insolvencies. The average debt of an individual filing for bankruptcy is more than 1.5 times that of an average Canadian household; bankruptcy filers tend to be unemployed or in low-wage jobs, and are typically renters. The article reports that banks that approve more loans per branch, which is interpreted as less-intensive use of soft information (such as the loan officer’s assessment of the applicant’s character), experience more client bankruptcies. This finding has important policy implications, because financial institutions that do not use soft information risk further deterioration in their lending portfolios.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Financial institutions,
Financial services
JEL Code(s):
D,
D4,
G,
G2
February 17, 2012
Weekly Financial Statistics - 17 February 2012
Content Type(s):
Publications,
Historical: Weekly Financial Statistics
February 10, 2012
Weekly Financial Statistics - 10 February 2012
Content Type(s):
Publications,
Historical: Weekly Financial Statistics
February 3, 2012
Weekly Financial Statistics - 3 February 2012
Content Type(s):
Publications,
Historical: Weekly Financial Statistics
February 2, 2012
Banking Crises and Contagion: Empirical Evidence
Content Type(s):
Publications,
Financial System Review articles
February 1, 2012
Measuring Financial Stress
Content Type(s):
Publications,
Financial System Review articles