BIS国际清算银行-How-are-household-finances-holding-up-against-the-Covid-19-shock_9页_656kb

Summary of BIS Bulletin No. 22: How are household finances holding up against the Covid-19 shock?

Core Content

This BIS Bulletin analyzes the impact of the Covid-19 pandemic on household financial resilience, focusing on debt levels, liquidity buffers, and exposure to income shocks. It emphasizes the importance of household financial stability for macroeconomic and financial systems, particularly in the context of the pandemic-induced recession and unemployment.

Key Findings

• Household Debt and Income:

  • Global household debt reached USD 40 trillion by end-2019.
  • The debt-to-GDP ratio peaked during the Great Financial Crisis (GFC) and has remained relatively flat since 2015.
  • There are significant differences in debt composition and levels across countries and within countries.
  • Mortgages dominate household debt, with over 90% in Germany, France, Spain, the UK, and the US.
  • Low-wealth households are more likely to have non-property-linked debt, such as auto, consumption, and student loans, while middle- and high-wealth households tend to have more mortgage debt.

• Financial Resilience and Liquidity Buffers:

  • Financial resilience refers to the ability of households to cover subsistence consumption and debt service costs during income loss.
  • Subsistence consumption is defined as 50% of median income.
  • Low-wealth households in most countries have insufficient liquidity buffers to cover more than three months of lost income.
  • Middle-wealth households in several countries (e.g., Australia, Denmark, Italy, the Netherlands, Norway, and the US) have buffers that are insufficient to cover two years of subsistence consumption.
  • High-wealth households typically have much larger buffers, often exceeding subsistence consumption levels by a wide margin.

• Covid-19 Shock and Unemployment Exposure:

  • The pandemic has caused a significant increase in unemployment forecasts in many countries.
  • The impact of the shock is more severe in countries with higher unemployment forecast increases, such as the US (3.5% to 10.3%) and Korea (4.1% to 4.5%).
  • There is a negative correlation between the size of the shock and financial resilience.
  • Middle-wealth households are especially vulnerable due to their higher debt levels, which are more sensitive to economic shocks.

• Policy Responses:

  • Policymakers have taken measures to enhance household resilience and mitigate the unemployment impact of the pandemic.
  • Monetary Policy: Most countries have adopted expansionary monetary policies, including low interest rates and debt repayment moratoriums.
  • Fiscal Policy: Targeted income support schemes, expanded unemployment benefits, and social protection programs have been implemented.
  • Wage Subsidies and Tax Relief: Wage subsidies and temporary tax relief have been used to support households and businesses.
  • Distributional Implications: These interventions have redistributional effects, shifting financial burdens from households to banks or future generations.

Main Viewpoints

• The financial resilience of households is critical for maintaining macroeconomic and financial stability during the pandemic.
• Low- and middle-wealth households are more vulnerable due to insufficient liquidity buffers and higher exposure to unemployment.
• Middle-wealth households are particularly important for financial stability because of their higher debt levels.
• The effectiveness of policy responses depends on the distribution of debt and buffers across households.
• Policy measures have both economic and political implications, as they redistribute risks and responsibilities.

Key Information

• Global Household Debt: USD 40 trillion at end-2019.
• Debt Service Burden: Increased in countries with rising debt levels.
• Subsistence Consumption: Defined as 50% of median income.
• Liquidity Buffers: Most low-wealth households can only cover up to three months of lost income.
• Policy Interventions: Include monetary easing, debt relief, fiscal support, wage subsidies, and tax relief.
• Countries Highlighted: The US, Australia, Korea, and several European nations show the most significant challenges in household resilience.

Conclusion

The Bulletin concludes that while policy interventions have helped bolster household resilience, the long-term impact of the pandemic will depend on the ability of households to maintain consumption and repay debts. Middle-wealth households, due to their higher debt levels, are especially important for financial stability, and their resilience is a key concern. The interplay between household buffers, debt levels, and exposure to the economic shock underscores the need for targeted and effective policy responses to protect vulnerable groups and support overall economic recovery.