The second statement is the Commission’s Study on the costs and Great things about the various Coverage Solutions for Financial Borrowing (European Fee, 2009, select particularly Annex B: Court Explanations)
To test the main hypothesis that straight to very early fees increase the interest rate give between the banks’ credit rates and financing cost within the a official fashion, we earliest developed a buyers protection index. The latest directory classifies regions according to brand of payment, or no, you to definitely consumers must pay on the lenders once they plan to pay back their mortgage loans before the contractual deadline. All of our categorical list variable selections throughout the reasonable amount of user cover To get discussed = 0 for the higher amount of user coverage Totally free = 2.
Right here we asked the main banking companies, ministries out-of fund of your own Associate States and bank or individual shelter connections concerning applicable number of consumer protection in their particular nations
Our very own list categorizes the brand new statutes ruling early cost in every Eu Affiliate States anywhere between 2006 and you can 2016 on thirty days-to-month foundation. To obtain details about what guidelines influenced very early costs at which era when you look at the a given nation, we draw from numerous present. A survey held by the Eu Payment included in their energy to harmonize the brand new Eu mortgage segments, gained detailed information on federal home loan , see especially profiles 5581). Using this data i’ve drawn information on the fresh new court regimes ruling early costs regarding the European union Representative Claims within the 2006. This study accumulated analysis for the degrees of user safety to own early payments during 2009. However, both account include primarily qualitative information regarding brand new federal defense accounts. We hence set up our personal class plan to quantify these studies and you will used a double-blind programming processes. In the long run, inside 2016 i conducted an e-mail questionnaire to gather our own top investigation. An individual shelter list one resulted from your class exercising is demonstrated inside the Desk cuatro, lower than.
Centered on the Consumer Safety List we written a couple of differently coded explanatory details. These types of parameters were chosen for all of our mathematical patterns to check on the fresh new theory more stringent user cover guidelines results in higher desire rate payday loans no bank account Strasburg CO advances within banks’ credit costs and you can credit costs. Our very own basic, fundamental changeable is the Consumer Safeguards to possess Early Repayment (Dummy) changeable. Since indicated of the the term, which varying is actually a good dummy one rules the initial sounding our very own index Compensation for the bank must be negotiated or injuries must be paid due to the fact 0 and all other categories, i.elizabeth. Responsibility cover otherwise lender’s even more administrative costs just and you can Totally free as 1. The explanation at the rear of which programming is the fact that reference category is short for those individuals places and this use brand new standard code found in contract legislation to own a violation of a customer financial price. The adjustable requirements due to the fact step 1 all the regions one to diverge using this standard rule and you may alternatively suggest a higher necessary shelter level getting individual financial agreements. So it dummy is hence a traditional and you can reliable measure of new user shelter membership getting very early repayments regarding various other Associate Says. We use the dummy varying within our fundamental mathematical designs, as we think about it is the best size to help you attempt our very own lookup hypothesis.
All of our 2nd varying ‘s the Individual Shelter having Early Installment (Categorical) adjustable. It categorical variable provides the same programming since consumer protection directory put more than. When compared to the dummy varying, it is the so much more carefully grained and you will advanced size. Regarding an appropriate perspective, the fresh changeable tends to be shorter legitimate, if we thought that multilinguistic, multijurisdictional environment of your European union produced brand new comparative legislation work about what the newest programming would depend a challenging activity. Also, the fresh variety of findings for each category was quicker well-balanced compared to the fresh new dummy variable. We thus make use of this varying having an over-all robustness attempt. Nevertheless, the outcome that we received that have each other details try consistent with each other.