Friday, December 19, 2014
Moreover, the report says that “Danish household debt continues to be the highest among the OECD countries, in large part to finance housing wealth. Household debt has been always relatively high in Denmark, but it grew rapidly during the housing boom, facilitated by the introduction of deferred amortization loans in 2003, reaching about 300 percent of disposable income. On the other side of the balance sheet, household assets are also large with positive net worth. However, these assets consist mostly of illiquid mandatory pension accounts and housing, leaving households with limited liquid buffers and making them more vulnerable to interest rate shocks. The need to rebuild balance sheets has depressed private consumption, weighing on the recovery in recent years.” Continue reading here. Also, see a special note on the mortgage finance system here.
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