Sumary of German banks vulnerable to housing bubble; should build buffers: Bundesbank:
- Article content FRANKFURT — Germany’s banks are increasingly vulnerable to an overvalued property market and finance authorities should force lenders to build up capital buffers, the Bundesbank said on Thursday in a regular stability report.
- Article content “The countercyclical capital buffer should be built up again early on,” Bundesbank Vice President Claudia Buch said in a statement.
- The buffer, now at 0, was set 0.25% of banks’ total risk exposure before the pandemic but current credit levels suggest that an even higher level may be needed, the Bundesbank added.
- This buffer does not explicitly take into account the booming residential property market, which requires careful monitoring and potential action by regulators, the Bundesbank said.