BIS: How Are Household Finances Holding Up Against The Covid-19 Shock?

Key takeaways

• As incomes shrink because of the Covid-19 shock, households must balance repaying debt with keeping up reasonable levels of consumption. 
• In several countries, low- and middle-wealth households have insufficient liquid buffers to weather a long spell of unemployment without falling behind on debt repayments. 
• The resilience of middle-wealth households is especially important: they hold relatively more (mortgage) debt and are more vulnerable in the countries that are more heavily exposed to the economic shock.