Every categories of the brand new index and a detailed breakdown is actually showed inside the Dining table step 3, lower than

Next declaration is the Commission’s Learn from the costs and Great things about the different Coverage Options having Financial Credit (Eu Fee, 2009, get a hold of specifically Annex B: Judge Explanations)

To test the fundamental hypothesis that the to early cost will increase the speed give within banks’ credit price and you will lending rates in the a authoritative manner, i first built a buyers shelter list. The latest index categorizes places according to the types of payment, if any, that customers need to pay on the loan providers whenever they want to pay the mortgage loans through to the contractual due date. The categorical index varying range regarding lowest level of user safeguards To be discussed = 0 to the highest amount of consumer protection No charge = 2.

Right here i asked the newest central banking institutions, ministries of finance of your own Member States and financial or user safeguards connections concerning the applicable number of user security in their respective nations

All of our directory classifies the latest rules ruling early cost throughout European union Affiliate Says ranging from 2006 and you can 2016 towards the thirty days-to-month base. To locate information on exactly what statutes influenced early money of which day and age during the confirmed country, i mark regarding multiple offer. A study used from the Western european Payment as part of their efforts so you can harmonize this new European mortgage areas, gained detailed information into federal financial , see particularly pages 5581). Out of this studies i have removed details about the legal regimes governing very early repayments in the Eu Affiliate States from inside the 2006. This research amassed analysis toward levels of user defense having early money during 2009. But not, each other reports contain primarily qualitative details about the latest national defense membership. I hence created our own classification scheme to help you quantify these study and you will then followed a dual-blind programming procedure. Finally, in 2016 we presented an elizabeth-send questionnaire to gather our own primary analysis. An individual safety index that resulted from your group exercise is demonstrated into the Dining table cuatro, less than.

Based on our Individual Shelter Directory we created several in different ways coded explanatory details. Such details were chosen for our analytical habits to evaluate this new hypothesis more stringent individual coverage guidelines results in high appeal speed spreads between your banks’ borrowing from the bank costs and you can lending cost. All of our first, chief changeable is the Consumer Safeguards having Very early Cost (Dummy) variable. Since the shown by the their identity, that it varying was an excellent dummy you to definitely codes $1500 loan with poor credit in Roxborough Park the first sounding all of our directory Payment with the lender need to be discussed otherwise problems have to be paid because the 0 and all sorts of almost every other categories, we.e. Responsibility cover otherwise lender’s a lot more administrative costs only and Totally free due to the fact step one. The explanation trailing this coding is the fact that resource category represents people regions and that use new default rule found in bargain laws getting a violation out of a consumer home loan price. The fresh variable rules because 1 all the places that diverge from this standard code and you can as an alternative prescribe increased compulsory safeguards peak getting user home loan deals. That it dummy is ergo a traditional and you may reliable way of measuring the consumer safeguards membership to have very early payments on more User States. I use the dummy changeable in our main mathematical habits, while we consider it are the most appropriate size so you can test the research hypothesis.

The 2nd changeable is the Individual Cover getting Early Installment (Categorical) varying. This categorical changeable contains the exact same programming because user cover index delivered significantly more than. In comparison to the dummy changeable, it will be the a great deal more carefully grained and you can cutting-edge level. Of a legal point of view, the newest variable could be smaller reputable, when we consider that the multilinguistic, multijurisdictional ecosystem of your Eu generated the relative rules effort on what the newest programming depends a challenging activity. Also, this new numbers of findings for each class are smaller balanced than for the brand new dummy variable. I thus use this varying getting a general robustness test. In any case, the outcome we received with both details was consistent with one another.