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. 

The views expressed in this publication are those of the authors and not necessarily those of the BIS.