Explores what caused the housing and mortgage crisis and provides remedies to repair the damage to ensure fairness, protect consumers, and guarantee soundness of the financial system without stifling innovation and overly restricting access to credit and consumer choice - Provided by publisher

We analyze whether the frequent use of credit lines is rational or influenced by behavioral traits of households. We consider the special case of Germany where credit lines on current accounts are available to 80% of the population. We document that the excessive usage of costly credit lines is...