The Bundesbank wants to improve the loan database


"As far as housing finance is concerned, we have very poor data," said Claudia Buch, Vice-President of the Bundesbank, at the presentation of the financial stability report 2018. The Bundesbank and BaFin finally want to change it.

The Bundesbank is of the opinion that the situation in the housing market is becoming increasingly worrying. Due to the high value of apartments in some major cities, up to 30% there is a risk that banks overestimate the value of the collateral. A reduction in prices due to an increase in interest rates or a slowing down of the economy could "feel the sense of the German financial system," the Bundesbank writes in its financial stability report 2018. The Bundesbank therefore urges banks to take appropriate precautionary measures and strengthen their capital reserves. In the Committee on Financial Stability, which includes representatives of the Bundesbank, BaFin and the Federal Ministry of Finance, the text of the Bundesbank Vice-President Claudia Buch discusses prescribing a countercyclical capital buffer that has already entered into force in other European countries.

At present, there is no need to use macroprudential measures

Another option to intervene at a supervisory level would be a stricter housing loan application. In June 2017, two such instruments were provided to financial regulators: the lending thresholds and depreciation. The book explained at the presentation of the Financial Stability Report that there are currently no conditions for the use of these instruments, although the Bundesbank has noticed easier lending. "At present, we do not see the need to activate macro-prudential measures in the real estate market," said Buch at the presentation of the Financial Stability Report. At the same time, he drew attention to the persistent dilemma that the supervisory authorities did not have enough market data to justify their use of the instrument. "We have a very bad database for housing finance."

"We need to do something here is very clear"

Although supervisors have a lot of aggregated credit knowledge, at the marginal level – what are the individual outflows of loans or indebtedness of borrowers – there is still not enough quality and quantity. "We need to do something, it's very clear," Buch said. Control is in "good conversation to move forward". At the beginning of the week, BaFin CEO Felix Hufeld was already speaking in the same direction. On the week of Euro Finance, he announced that he would seek to find detailed information on housing finance at banks.


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