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Real estate loans: European Central Bank urges caution

2021-10-14T10:33:22.902Z

Is the housing market threatened with overheating? Europe's top banking supervisor Andrea Enria sees an "increase in vulnerabilities" in several countries: banks could underestimate the extent of bad loans.



Bank supervisor Enria (archive image)

Photo: © Heinz-Peter Bader / Reuters / REUTERS

Andrea Enria, chief banking supervisor of the European Central Bank (ECB), has warned of a possible bubble in the real estate market.

"We see an increase in vulnerabilities in residential real estate in some countries," said Enria before the Economic Committee of the European Parliament.

By and large, the number of non-performing loans is still manageable, Enria continued.

However, the quality of the underlying assets seems to be deteriorating.

Banks' forecasts for bad loans may be too optimistic.

Enria advised caution when dissolving risk provisions.

Enria had already said on Wednesday that some loans had deteriorated in quality.

Overall, however, it painted a positive picture of the situation in the banking sector.

The institutes have so far mastered the corona pandemic well.

dab / Reuters

Source: spiegel

All business articles on 2021-10-14

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