Younger households have higher debt levels relative to the value of their assets and they need to spend a bigger share of their income on servicing their debt. Indicators of vulnerability are also higher for households with lower incomes. The same goes for single-parent households and adults living on their own.
For these reasons, one of the most important challenges for a central bank in its role as prudential supervisor, is to find a way to limit risks for the financial system without restricting people’s access to credit, especially younger households.