The Economics of Consumer Credit

<p><p> </p><p></p><p><p>The value of personal debt, both secured on housing wealth and unsecured debt such as credit and store cards, has grown rapidly in Britain in recent years. There is increasing concern over excess indebtedness, over higher levels of default on debt, and the increasing personal bankruptcy rate. Criticism has also been voiced as to the lack of regulation of parts of the personal finance industry - in particular of door-to-door selling of loans, saving clubs and the like. Political parties are now turning their attention to these issues with the Conservative Party proposing a 'cooling off' period between access to unsecured credit instruments such as store cards and consumer purchases.</p> </p><p></p><p> </p><p></p><p><p>This lunchtime talk by Richard Disney will look at these issues. In particular, it will consider whether the perception of 'excessive' indebtedness among British households is justified? Which families are most at risk of difficulties in repaying debt? Is there overmuch focus on high profile indicators of indebtedness such as credit card balances and insufficient discussion of the position of low income families with limited access to prime credit markets?</p> </p><p></p><p> </p><p></p><p><p>The talk will update research published in 2003 by IFS that looked at which families were most likely to face financial difficulties and excess indebtedness, to see whether the position has changed in recent years. It will also consider, briefly, recent suggestions for closer regulation of personal finance and the implications of Farepak.</p> </p><p></p><p> </p><p></p><p><p>Delegates will also have the opportunity to purchase, at the reduced price of £20, a book published by MIT Press in autumn 2006, edited by Richard Disney with Giuseppe Bertola and Charles Grant titled <a href="http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=10992">The Economics of Consumer Credit</a>. </p><p></p><p></p></p>