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Warning: housing bubbles!

European Central Bank advisory body issues country-specific reports

Frankfurt, 29 November 2016 | Published in Economy

On 28th November, the European Systemic Risk Board (ESRB) – an advisory body to the European Central Bank- has published a set of country-specific warnings on medium-term vulnerabilities in the residential real estate sector.

These countries comprise: Austria, Belgium, Denmark, Estonia, Finland, Luxembourg, Malta, the Netherlands, Slovakia, Sweden and the United Kingdom. Vulnerabilities were identified and separated into three “stretches” – collateral, household and banking – where collateral stretch captures the price levels and dynamics in Residential Real Estate (RRE) markets, household stretch captures the implications of household borrowers’ debt for their consumption and other behaviour, and banking stretch captures the potential impact of RRE developments on lenders.

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