All of our empirical observations come in range towards disagreement your advanced you to definitely finance companies costs their clients can be larger in a situation of large interest rates. Anyway, the possibility of early repayment of the consumer grows toward interest just like the an evergrowing interest and additionally boosts the chance, the upcoming interest is lower than the present interest. I attempted to clearly shot the new theory the rate of interest spread develops on the industry interest rate into the associate claims that have zero otherwise capped settlement getting expectation damages in the eventuality of early repayment. To do this i suitable several patterns (not found) to analyze whether in times out of higher rates of interest the borrowed funds banks’ interest rate bequeath is actually high for the places with a high membership out of consumer coverage compared to countries which have low levels away from user shelter.

Yet not, none of them patterns provided performance you to definitely demonstrably served otherwise refuse our argument. This is exactly due to the after the factors. Earliest, we had been unable to receive number 1 research into refinancing will cost you away from home loan banking companies from inside the per Eu user county. Read more