Another declaration is the Commission’s Learn from the expenses and you may Advantages of the different Policy Choices to have Home loan Credit (European Commission, 2009, look for specifically Annex B: Courtroom Information)

To evaluate our very own head hypothesis the directly to very early cost increase the pace spread involving the banks’ borrowing from the bank rates and you may financing rates within the a very authoritative trend, we basic constructed a customers protection directory. The fresh new directory categorizes places with regards to the version of compensation, or no, one customers must pay on their lenders when they intend to pay-off their mortgages till the contractual due date. Our categorical directory adjustable range on low amount of user security As discussed = 0 on higher amount of user defense No charge = 2.

Here i requested new main finance companies, ministries off money of Affiliate Says and you can financial or consumer coverage relationships regarding relevant amount of user coverage inside their particular regions

The list classifies the brand new statutes ruling very early repayment throughout European union Associate Says between 2006 and you will 2016 to the 30 days-to-times base. To locate information about just what legislation influenced early payments where era into the a given nation, i draw out-of numerous provide. A survey used from the Western european Percentage included in its effort so you can harmonize the newest European home loan places, attained detailed information for the federal mortgage , get a hold of specifically profiles 5581). From this investigation i have taken information on the new judge regimes governing early repayments in the Eu Associate Claims in 2006. This http://paydayloancolorado.net/stonegate study compiled studies toward degrees of consumer coverage having untimely costs during 2009. Although not, each other profile contain mostly qualitative information about new federal defense account. I for this reason build our own classification strategy so you’re able to assess these data and you can accompanied a dual-blind programming procedure. Eventually, when you look at the 2016 i presented an age-post survey to gather our personal top investigation. The user coverage directory that lead from our class workout is displayed when you look at the Dining table 4, below.

Based on our very own User Cover Index we created several differently coded explanatory details. Such parameters were used in the mathematical habits to test the brand new theory that more stringent user protection rules causes highest interest price develops amongst the banks’ credit cost and you will financing cost. Our very first, head changeable ‘s the Consumer Shelter getting Early Repayment (Dummy) varying. As shown by the term, this adjustable is a dummy you to requirements the initial group of our directory Settlement for the bank must be negotiated otherwise problems should be paid since the 0 and all sorts of almost every other kinds, we.e. Accountability cap otherwise lender’s even more management expenditures merely and No charge since step one. The explanation behind this coding is the fact that source class stands for those individuals countries which implement the default rule included in contract legislation to possess a breach out of a consumer mortgage package. New adjustable rules as 1 the nations you to diverge from this standard laws and rather recommend increased compulsory safeguards top to own consumer financial agreements. That it dummy is actually hence a traditional and you will reputable way of measuring the brand new consumer safety account to possess very early repayments from the various other Associate Claims. I use the dummy varying in our head analytical designs, even as we consider it to be the best measure to help you sample all of our search theory.

Our 2nd varying ‘s the Individual Safety having Early Cost (Categorical) varying. It categorical varying gets the same coding since consumer defense list put more than. In comparison to the dummy variable, it is the a whole lot more carefully grained and you will complex measure. Out of an appropriate point of view, the latest adjustable can be shorter legitimate, when we imagine that multilinguistic, multijurisdictional ecosystem of your European union made brand new relative laws efforts on which the programming would depend a challenging activity. Furthermore, the fresh new amounts of findings for each and every group is shorter well-balanced than for the new dummy varying. I thus use this variable getting a standard robustness take to. In any case, the outcome we gotten having each other details is in line with each other.