Early implementation of public aid to the bank solvency crisis in Spain in 2008-2013: Impact on household credit and economic cycle

Abstract

This research describes the eventual credit constraints faced by households during the recession that broke out in 2008, using a set of variables that determines the credit such as the solvency and the NPL ratios. We develop a OLS model in order to estimate the rate of credit within an alternative scenario. Based on this new scenario, we suggest the impact of an alternative financial policy intervention on the credit rating, considering if it had taken place more decisively when compared to other European countries. The results acknowledged higher credit rate, which confirm a less abrupt evolution of the variables and a lower impact of the crisis.