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Skyline of Frankfurt: reminder to the banks
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With regard to Russia, politicians speak of sanctions that are as targeted as possible.
But in practice, the implementation is apparently not so simple.
Bundesbank board member Joachim Wuermeling warns that German financial institutions would interpret punitive measures against Russia too severely.
"We see here and there that sanctions are being over-fulfilled," Wuermeling told the "Handelsblatt".
Institutes should not exclude citizens with a Russian background across the board for fear of violations.
»Financial institutions must be careful to maintain moderation and not unintentionally disadvantage anyone.«
At the same time, he certified that the banks were making serious efforts not to violate sanctions.
"They now have experience in this, and we are currently not observing any significant violations," Wuermeling said.
In response to the Bucha atrocities, the US has already announced new sanctions.
The US government wants to ban "all new investments" in Russia.
In addition, existing sanctions against Russian banks and state-owned companies are to be tightened and other people from the Russian leadership and their family members are to be subject to punitive measures.
Not only the sanctions against Russia are a sensitive issue for banks.
In view of the uncertain economic prospects, the Bundesbank also warns against risky loans from institutes - especially in the real estate sector.
Risks for banks from real estate loans
Housing construction loans have become more risky for the banks because of rising prices, said Wuermeling.
»The indebtedness of real estate buyers is increasing: They are financing an increasing proportion of their acquisition costs with loans and are bringing less and less equity with them.«
Household incomes have not risen to the same extent as the cost of real estate.
Market data indicate that in new business, the loan amount exceeds the purchase price of the property in almost ten percent of cases.
The market is becoming more and more vulnerable, said Wuermeling.
Loans with a fixed interest rate of more than ten years accounted for half of household loans for house purchase.
»In the middle of a turnaround in interest rates, banks would still have very low-interest loans on their balance sheets for a few years, but would have to pay higher interest rates for refinancing.«
If further excessive risks build up, one reserves the right to adjust the capital buffers for banks or to use other instruments, said Wuermeling.
The share of residential real estate financing in the bank balance sheets is now at 35 percent of all bank loans.
mmq/dpa/Reuters