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The overseer warns banks against loose loans. Some major banks in Europe may be difficult to handle in an emergency.
13:56, November 18, 2018
FMA Executive Klaus Kumpfmüller Warning banks too weak to lend. "We have seen that residential loans have become more lenient, for example, in the case of lending, despite small own funds or maturities of up to 40 years," said Kumpfmüller of "Tiroler Tageszeitung" (Saturday).
He does not see a real estate bubble in Austria, said the financial market supervisor. Although real estate prices have risen sharply over the past ten years, they are still at a low level compared to other European countries. However, we need to be vigilant so that prices do not continue to grow strongly.
Too big to fail?
Banks in Austria are much safer than pre-crisis levels, and equity rates have doubled from just under 8% to about 15%. "Today's banks will face Lehman bankruptcy," Kumpfmüller is convinced. In addition, the European Union of Banks has been developed, including the central bank supervision of the major European banks or a European problem-solving fund in case of failure of the bank.
However, Kumpfmüller admits that some European banks may prove to be too high in an emergency. "There are certainly big banks in Europe, where I wonder if they might even settle."
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