Financial: a planned cap on property loans

More powers for financial supervision: Does the BaFin the risk of a housing bubble, they should be allowed to intervene in the future according to the wish of the Union.

Us of the Union faction calls for a rethinking of financial market regulation is loud. The occasion is the Regulatory Law Amendment Act, with the financial supervision BaFin receives a precaution new instruments to intervene in the case of an impending bubble in the property market. This Thursday, the Bundestag consults for the first time about it.

The CSU deputy Alexander Radwan called for a tight “control corset” in an interview with the Frankfurter Allgemeine Zeitung. “There must be no free ride here for BaFin.” We need the involvement of Parliament. “In this context, the parliamentary participation has to be defined, such as hearings and annual reports of the Finance Committee of the German Bundestag,” the CSU politician said.

Requirements for the loan amount, duration, repayment

The Regulatory Law Amendment Act builds on recommendations that have been mid-2015, the Committee for financial stability. Instead of fixed new requirements for financial institutions is to enable the Financial permit to act quickly when the circumstances require, in their view. When she sees the risk of a housing bubble, they should be given the possibility to specify an upper limit on the ratio between the loan amount and real estate value. The share of foreign funding would be capped.
In addition, the BaFin will then be able to specify a time period in which a portion of the real estate financing must be repaid. Other screws are a credit limit based on disposable income, a lower limit for repayment, and the ratio of the total debt of a borrower to his income.

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Exceptions there should be for small loans, but also for loans to finance renovations and refurbishments. In addition, should be excluded from follow-up financing and social housing. It is also provided that banks may award property loans to a certain extent outside the strict new rules if this does not endanger the stability of the institution.

The CSU politician Radwan spoke in favor of initiating the Regulatory Law Amendment Act a paradigm shift in the regulation and supervision. He was willing to concede the Financial flexibility, but in return, the BaFin should be required intense before the Bundestag to account.

At the same time urged the deputies from the constituency Starnberg, then check the existing financial market regulation. So must look to whether the rules so worked, how it had promised when it was introduced. He spoke in this context of “customer-unfriendly and non-banking” laws that do not contribute to financial stability.