Regulation of short-term consumer credits

  • Tuomas TakaloEmail author
Original Article


The regulation of short-term consumer credit markets is heatedly debated around the world. This article uses economic research as a basis for a qualitative assessment of the regulation of the short-term consumer credit market and discusses the experience of the recent regulations implemented in Finland. According to research, the interest rate ceiling is an inefficient way of regulating the short-term consumer credit market. In contrast, the regulations should be based on price transparency and results from behavioral economics.


Banking regulation Interest rate caps Payday lending Credit markets Financial stability 



The author has engaged as an expert on issues relating to consumer credits by 4finance in the past. The views expressed in this article belong to the author and do not necessarily correspond to those held by the Bank of Finland nor 4finance. The author thanks Dalvinder Singh (the Editor), seminar participants at 4finance, Essi Eerola, Ari Hyytinen, Kimmo Koskinen, Tuomas Louhela, Hanna Putkuri, and Jukka Vauhkonen for their useful comments and discussions. He also thanks the OP Group Research Foundation for funding.


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Copyright information

© Springer Nature Limited 2019

Authors and Affiliations

  1. 1.Bank of FinlandHelsinkiFinland
  2. 2.VATT Institute for Economic ResearchHelsinkiFinland

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