All categories of the newest list together with an in depth dysfunction is demonstrated from inside the Table step 3, below

The second statement is the Commission’s Study on the costs and you may Benefits of different Policy Choices for Mortgage Borrowing from the bank (Eu Commission, 2009, select especially Annex B: Courtroom Explanations)

To test the chief hypothesis that the straight to early installment will increase the pace bequeath between the banks’ credit price and credit prices into the a formal trends, we earliest developed a consumer cover index. This new list categorizes nations according to the sort of settlement, if any, one people need to pay to their lenders when they propose to pay-off its mortgage loans until the contractual deadline. All of our categorical directory variable selections in the low quantity of consumer cover Are discussed = 0 on the higher amount of consumer protection No charge = 2.

Here we expected the central banks, ministries out-of financing of your Member States and financial or individual cover contacts regarding the relevant level of individual protection within their respective countries

All of our directory classifies the fresh new legislation ruling very early repayment in every Eu User States ranging from 2006 and you may 2016 on thirty days-to-month foundation. To find information regarding exactly what laws governed very early money at which era into the certain nation, i mark of several offer. A survey conducted of the Eu Payment as an element of its work so you’re able to harmonize the European home loan avenues, achieved detailed information for the federal home loan , look for especially users 5581). From this study i have taken information on the court regimes governing early costs about European union Member States inside 2006. This research gathered investigation toward amounts of individual defense having early repayments in ’09. But not, both reports incorporate mostly qualitative information regarding this new national safety profile. We therefore build our personal category strategy to quantify these types of research and adopted a two fold-blind coding techniques. Finally, when you look at the 2016 we presented an e-post questionnaire to get our very own top study. An individual security index you to lead from our category exercising is displayed within the Desk 4, lower than.

Considering our Individual Protection List we authored a couple differently coded explanatory variables. These details were used in the statistical activities to check on the fresh new hypothesis that more strict individual security statutes causes higher attract rate develops between your banks’ credit pricing and you can lending prices. Our basic, main variable is the Individual Shelter to possess Very early Fees (Dummy) varying. Due to the fact shown by its identity, which variable are good dummy one requirements the first group of our directory Settlement to your financial need to be discussed or injuries need to be paid because the 0 as well as most other categories, we.e. Responsibility limit otherwise lender’s more management costs only and you will Totally free as 1. The explanation at the rear of which programming is that the resource classification stands for men and women nations and that implement the fresh new default code included in price rules for a violation of a customers home loan bargain. The brand new variable rules as step one every countries one diverge out of this default laws and instead recommend increased necessary defense height to own individual home loan deals. That it dummy was ergo an old-fashioned and you can reliable measure of the new consumer security account to possess early payments regarding the more Representative Says. We use the dummy varying within our main statistical models, as we contemplate it become the most appropriate measure so you’re able to shot our very own look hypothesis.

All of our next varying is the Consumer Defense getting Very early Installment (Categorical) adjustable. Which categorical variable provides the same coding as consumer protection index brought significantly more than. When compared to the dummy adjustable, it’s the much more finely grained and cutting-edge scale. Away from a legal point of view, brand new adjustable is loans in Penrose smaller reliable, whenever we believe that multilinguistic, multijurisdictional environment of one’s Eu made the relative laws effort about what the latest coding depends a difficult activity. Also, the newest quantities of observations per classification are shorter well-balanced than for the latest dummy variable. I ergo utilize this variable having a general robustness take to. Regardless, the outcomes that people acquired having one another parameters is in keeping with each other.