After a 3-year struggle the European Union has withdrawn a proposal for tighter consumer credit rules that would have put more responsibilities on banks, following pressure from industry lobbyists who fear that a tightening of guidelines for banks would have resulted in slower credit growth. The EU consumer credit volume is estimated at 500 billion Euros annually, with two thirds of Europeans financing bigger items by credit. The European Bank Association Ebic has resisted tighter guidelines as they would unnecessarily burden its members and might reduce GDP growth by as much as 0.2 percent, it said. In the light of Europe's slow growth rates this could be the difference between growth and stagflation.
Statistics from the Europen Credit Research Institute for 2002 show that households in the United Kingdom - Europe's hottest housing market, just about to cool off - spent a third of their disposable income on credit payments, followed by Spain and Austria. The comparable figure for the US lies at 20 percent. These numbers will not have changed significantly in the more recent past. Consumer credits are a mainstay for bank profits in Europe where credit card use lags behind the US.
EU won't tighten consumer credit rules - bubble can build
Friday, May 06, 2005
Email ThisBlogThis!Share to TwitterShare to FacebookShare to Pinterest
Posted by
The Prudent Investor
on
5/06/2005 12:20:00 pm


Labels:
Austria,
bubble,
GDP,
housing,
interest rates
Subscribe to:
Post Comments (Atom)
0 comments
Post a comment