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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Borrowing in foreign currency: Austrian households as carry traders |
| Organization Unit | |
| Authors |
|
| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Banking and Finance |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0378-4266 |
| Volume | 34 |
| Number | 9 |
| Page Range | 2198 - 2211 |
| Date | 2010 |
| Abstract Text | Household borrowing in a foreign currency is a widespread phenomenon in Austria. Thirteen percent of Austrian households report their housing loan to be denominated in foreign currency, mostly Swiss franc. Yet, despite its importance, peculiar character, and acute policy concerns, we know little about the attitudes and characteristics of the households involved in this type of carry trade. We analyze a uniquely detailed financial wealth survey of 2556 Austrian households to sketch a comprehensive profile of the attitudes and characteristics of the households involved. We employ both univariate tests and multivariate multinomial logit models. The survey data suggest that risk seeking, affluent, and married households are more likely to take a housing loan in a foreign currency. Financially literate or high-income households are more likely to take a housing loan in general. These findings partially assuage policy concerns about household default risk on foreign-currency housing loans or household retirement security. |
| Free access at | Official URL |
| Official URL | http://www.sciencedirect.com/science/article/pii/S0378426610000701 |
| Digital Object Identifier | 10.1016/j.jbankfin.2010.02.008 |
| Other Identification Number | merlin-id:11785 |
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