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Bundesbank deputy chief warns financial institutions against careless lending

2021-12-23T09:25:42.124Z


Zero interest rate policy, corona-dampened economy, price increases: business has not become easier for banks. Bundesbank Deputy Chief Buch warns of carelessness in the fight for returns.


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Banking district in Frankfurt am Main: A rise in interest rates would be difficult

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Frank Rumpenhorst / dpa

Bundesbank Vice President Claudia Buch has warned credit institutions in Germany against taking too much risk amid the pandemic.

»At the moment we are seeing increasing vulnerabilities and a declining risk awareness in the financial system - the focus everywhere is on the search for returns.

That worries me «, warned Buch in an interview with the» Handelsblatt «.

"In relative terms, more loans have been granted to weaker companies for some time," said Buch.

From their point of view, risks are the indirect consequences of the pandemic and the question of whether the financial system as a whole will come under stress again.

"That could happen, for example, if market interest rates rise abruptly," said the Bundesbank Vice President, who is responsible for financial stability at the central bank.

"A sudden rise in interest rates would be difficult for everyone: banks, insurers, but also funds are vulnerable."

Buch again spoke out in favor of the banks rebuilding the so-called countercyclical capital buffer that was exposed in the pandemic.

The additional capital buffer is intended to make banks more resilient in times of crisis.

The Bundesbank Vice President is also critical of the price development on the local real estate market.

"There are some ingredients that are worrying us," said Buch.

“Those are the prices that have recently risen by about seven percent.

Lending for real estate has also risen sharply. «In addition, according to Bundesbank surveys, around 90 percent of private households expect prices to continue to rise.

mik / dpa-AFX

Source: spiegel

All business articles on 2021-12-23

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