This paper uses representative individual household data from Luxembourg to evaluate how severe economic conditions … could affect bank exposure to the household sector. Information on household income, expenses and liquid assets are used to … calculate household-specific probabilities of default (PD), aggregate bank exposure at default (EAD) and aggregate bank loss …

household expenditure data to examine which expenditure categories are prioritised when households enter into financial stress … important implications for how we understand household sensitivity to shocks and the behaviour of households with regards to … risk management, as well as the capacity of private insurance markets to stabilise the household sector. The findings also …