The starting date of the estimation sample of the countries examined ranges between 2003Q1 and 2011Q3, with the last observation being 2021Q3 for all countries. 3 Frederic S. Mishkin, Housing and the Monetary Transmission Mechanism, NBER  working paper 13518, October 2007. 4 The period of Quantitative Easing is defined according to the speech by Vítor  Constâncio, Vice-President of the ECB "Past and future of the ECB monetary policy" and starts in July 2014. 5 Data from the Household Finance and Consumer Survey, 2017. 3/3  BIS - Central bankers' speeches
Debt service has not risen by the same proportion, due to rising  BIS Review 41/2007  1  incomes and easier credit terms, and arrears are at a low. However, some borrowers have stretched their capacity to the limit and the most indebted group has seen its debt grow substantially as a proportion of income and assets in recent years. Conditions will not need to change much to cause them serious difficulties. The bulk of household debt is in the form of CPI-indexed mortgage loans, making low inflation critical. Household debt in foreign currency was very low, but has been increasing. High levels of foreign currency-denominated debt could prove questionable for households with no income in foreign currency. Since house prices are currently buoyant, they are likely to rise by less than general inflation or even fall in nominal terms. Household equity could shrink under such conditions. Business profitability appears to have been strong in 2006, in spite of a massive increase in financial expenses from exchange rate losses on foreign borrowing, higher interest expenses and a substantial increase in interest-bearing debt. Debt of listed companies grew as a ratio of equity and the same is probably true of other businesses. Higher debt levels leave them more vulnerable to a contraction in the economy. Equity prices have soared in Iceland in recent years. One explanation for the increase may be that Icelandic companies were undervalued by the markets, for example by international comparison, and another that bold investment ventures have driven up their value.