The following statement is the Commission’s Learn from the costs and you can Advantages of the various Policy Choice to possess Home loan Borrowing (Eu Commission, 2009, discover specifically Annex B: Judge Summaries)

To test all of our main hypothesis your directly to very early payment will increase the rate pass on amongst the banks’ borrowing from the bank speed and you will lending rates within the an even more official manner, i basic constructed a buyers over at this website cover index. The fresh index categorizes places according to sorts of settlement, if any, one customers need to pay on their lenders when they propose to pay its mortgage loans until the contractual due date. All of our categorical directory adjustable ranges about lowest number of consumer protection Are discussed = 0 into highest quantity of consumer cover No charge = 2.

Right here i expected brand new main financial institutions, ministries out of finance of your Member Claims and you will bank otherwise user safeguards connectivity regarding the relevant level of consumer safety inside their respective countries

Our directory classifies brand new laws and regulations governing very early repayment throughout European union Representative Says between 2006 and 2016 for the thirty day period-to-week base. Discover information on what statutes influenced very early costs where era within the confirmed country, i draw off several offer. A study presented by the Eu Fee as part of its work to harmonize the fresh new European financial segments, gathered more information on the national mortgage , see specifically profiles 5581). Out of this data i have removed details about the latest courtroom regimes governing early repayments regarding Eu Associate Says in the 2006. This research collected research with the quantities of individual safety to have untimely repayments during 2009. However, each other account have generally qualitative information about the fresh federal coverage levels. I hence set up our very own category system so you’re able to assess this type of data and you can followed a dual-blind coding techniques. Fundamentally, from inside the 2016 i presented an elizabeth-send survey to collect our very own top investigation. The user cover directory one to lead from our class exercise is presented in the Dining table 4, below.

According to all of our Consumer Defense List we authored a couple of in a different way coded explanatory details. This type of variables were used in our very own statistical patterns to test the hypothesis more strict consumer protection guidelines results in higher attention price spreads involving the banks’ credit prices and financing costs. Our very own very first, chief varying ‘s the Individual Safeguards to own Very early Payment (Dummy) variable. Due to the fact expressed by the its term, that it varying is a good dummy that rules the initial sounding the index Compensation to your financial must be discussed or problems must be paid because 0 and all of other groups, i.age. Accountability cover or lender’s even more administrative costs only and you will No charge while the step one. The rationale at the rear of it coding is the fact that site class is short for people regions which implement the fresh new default rule included in price laws to possess a violation out-of a consumer mortgage contract. The new changeable requirements because step one the regions you to definitely diverge from this default signal and you may alternatively suggest increased necessary protection level to own user financial contracts. Which dummy try ergo an old-fashioned and you can legitimate way of measuring the fresh consumer shelter profile for early payments throughout the more Affiliate States. We use the dummy adjustable within our fundamental analytical models, while we consider this become the most likely level to help you try our browse theory.

All of our 2nd adjustable ‘s the User Safety to possess Very early Payment (Categorical) variable. That it categorical varying comes with the same coding because the user security directory introduced over. When compared to the dummy variable, it’s the a lot more carefully grained and you can state-of-the-art size. Regarding a legal perspective, this new changeable could be quicker reliable, if we envision that multilinguistic, multijurisdictional environment of your own Eu produced the fresh comparative laws work about what the coding is based a challenging task. Additionally, the new amounts of observations each class try less balanced than for the dummy adjustable. We therefore utilize this varying for a general robustness sample. In any case, the outcome that individuals acquired which have each other details was in keeping with one another.