What's the story behind Danish households' rising debt?

Analysis - June 2020 - No. 13

Authors Yordanova, Ianna Georgieva; Otte, Alexander Meldgaard
Subject household balance sheets; Housing finance; Lending rate; Models; Financial regulation; Financial stability
Type Analysis
Year 2020
Published 24 June 2020
Abstract icon Over the past four decades, debt has increased significantly faster than incomes and accounts for approx. 260 per cent of the disposable income of Danish households in 2020. This analysis presents a measure of household structural credit and reviews the economic factors that have contributed to this development. Besides higher incomes, greater wealth and lower borrowing costs have led to increasing debt over a long period of time. Both lower interest rates and regulatory easing have contributed to this development.