Household mortgage debt unleashed devastating consequences for the global economy in 2007-2008. Yet, despite the growing importance of household debt in financial markets, international and comparative political economy scholars have not theorized why it varies so much across Europe. Aidan’s paper argues that variation in household debt can be explained by the intersection of two domestic institutions: labour market institutions (and by extension the welfare state) that enable households to withstand negative employment/income shocks, and mortgage finance institutions that govern households’ credit access. The paper empirically demonstrates via a panel analysis of 17 advanced capitalist democracies that the impact of these institutions on household debt is co-dependent. Strong collective bargaining institutions (and generous welfare states), which protect borrowers from income and employment insecurity, are associated with higher household indebtedness, but only if housing finance institutions that encourage mortgage lending are present (i.e. in Scandinavian social democracies). In contrast, liberal market (financialized) economies have comparatively lower household indebtedness because their labour market institutions inhibit income security for borrowers. The findings suggest that the conditions for a property owning middle class – a defining feature of contemporary capitalism – is increasing dependent on both wage growth and rising household debt accumulation. Dr Tim Vlandas (St Antony’s College, Oxford) chairs.