The paper analyzes the vigorous consumer credit growth recorded since 2015 in Italy and in the main euro-area countries. It focuses on the drivers of credit expansion by evaluating the relative weight of credit demand and supply, and investigates the risks to financial stability stemming from trends in consumer credit.
Growth in consumer credit has been boosted everywhere by demand; the easing of supply conditions contributed to the increase in Italy and Spain only. The risks stemming from the expansion in consumer credit are mitigated by the low incidence of these loans on households' income. In Italy, where the share of households in arrears is higher, the riskiness of these loans has declined significantly owing to the more widespread diffusion of consumer credit among more affluent households.
Published in 2022 in: European Review, v. 30, 3, pp. 322-352
