Highly indebted poorer households pose risk to Israeli banking system
Bank of Israel says lenders should look more carefully at ‘payment-to-income' ratio
An excerpt from the Bank of Israel's upcoming Financial Stability Report shows that loan-to-income ratios for households with mortgages are greatest in the lowest income decile – representing households that are also more exposed to unemployment, the central bank warns.
Housing credit makes up a growing proportion of banks' credit portfolios and of household debt, meaning banks are increasingly exposed to the household sector in the case of a "sharp and rapid turnaround in the housing market
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