We cannot assess households’ solvency by looking at their net assets

Based on the high level of households’ net assets (the gap between their property and financial wealth and their debt, we will take the examples of the United States and the euro zone), some economists reject the idea that there could be a household debt crisis today. But we can not assess households’ solvency by looking at their net asset s , for several reasons: The households that hold wealth and the indebted households are not the same; In the event of a crisis, the value of households’ real estate and financial assets declines while the debt remains unchanged; as we saw before the 2008 crisis, the fact that net assets are high before a crisis therefore does not mean there will be no crisis.