Study reveals how portfolio choices impact financial fragility across Europe and US
Households in Europe and the US were studied to see how their financial stability is affected by their portfolio choices and economic factors. The researchers found that having more illiquid assets makes it more likely for a household to be financially fragile, while having a mortgage can reduce this risk. Different countries have varying levels of financial fragility among their households. The economic and institutional setup of a country plays a significant role in protecting households from financial instability, especially in Europe.