All of the kinds of the index plus a detailed malfunction is actually showed inside the Table step three, lower than

Next declaration is the Commission’s Study on the expenses and Benefits associated with different Plan Possibilities to possess Mortgage Credit (Western european Fee, 2009, come across specifically Annex B: Legal Summaries)

To check our chief hypothesis the directly to early fees will increase the pace spread within banks’ borrowing rates and you may lending cost in a far more official trends, i basic constructed a customers shelter directory. The brand new directory classifies nations according to the sort of compensation, if any, you to people must pay on their loan providers if they plan to pay-off the mortgage loans before contractual due date. All of our categorical directory variable selections on reasonable number of user safeguards Getting negotiated = 0 towards the high quantity of user cover Totally free = 2.

Right here we requested brand new central financial institutions, ministries of financing of one’s Associate States and lender otherwise user protection connections in regards to the relevant number of user defense within their particular nations

All of our list classifies the brand new laws and regulations ruling very early cost throughout European union User Claims between 2006 and you will 2016 for the thirty day period-to-few days foundation. To obtain information about what legislation ruled early costs at which time from inside the a given nation, i mark out-of numerous present. A study held because of the Western european Fee as part of their energy to help you harmonize the brand new Western european home loan avenues, gained detailed information on federal mortgage , see especially profiles 5581). Out of this research i’ve pulled information regarding new court regimes ruling early repayments throughout the Eu Affiliate Says during the 2006. This study collected investigation on the degrees of individual protection to have untimely money in ’09. However, each other profile contain mainly qualitative information regarding new federal cover account. We ergo build our own class strategy to measure these types of data and you can then followed a dual-blind programming processes. Ultimately, within the 2016 i used an age-mail survey to gather our personal number one data. The user protection list you to definitely resulted from our class workout is displayed within the Desk 4, lower than.

Considering our very own Consumer Cover List i composed a couple of differently coded explanatory parameters. This type of variables were used in our very own analytical patterns to check the fresh theory that more strict individual security statutes causes highest attract price spreads amongst the banks’ borrowing from the bank rates and you will lending pricing. Our earliest, fundamental variable is the Consumer Security for Very early Fees (Dummy) adjustable. Due to the fact indicated because of the their title, this varying are good dummy one to rules the initial sounding our very own list Settlement towards lender must be negotiated or damage should be paid just like the 0 and all of most other groups, i.age. Responsibility cover or lender’s additional management expenditures merely and you will Totally free given that 1. The rationale at the rear of it coding is the fact that source category is short for men and women places and therefore incorporate this new default rule used in package legislation getting a violation of a consumer financial bargain. New changeable codes while the step one all of the countries one diverge from this default code and you may instead recommend a higher required security height to possess user home loan deals. Which dummy is ergo a conservative and credible way of measuring the new consumer cover profile to have very early payments on more Affiliate States. I loans Silver Cliff use the dummy variable within our chief statistical patterns, as we consider this becoming the best measure so you’re able to shot all of our research theory.

The second changeable ‘s the Consumer Coverage to own Very early Cost (Categorical) variable. This categorical adjustable has got the exact same coding because individual security list lead over. In comparison to the dummy adjustable, it is the alot more finely grained and you may complex level. Out of an appropriate attitude, brand new changeable may be faster reputable, if we consider the multilinguistic, multijurisdictional environment of one’s Eu generated the brand new comparative rules work on what the new coding depends a challenging task. Additionally, the fresh amounts of observations for every single category is shorter well-balanced than for the brand new dummy varying. We ergo make use of this varying to have a broad robustness sample. Regardless, the results that we obtained having both variables try in line with each other.