The EBA published a thematic note on EU banks’ residential real estate exposures. EU banks reported more than EUR 4.1 trillion of loans and advances collateralized by residential immovable property. This corresponds to one third of all loans towards households and non-financial corporates. DNB sees the worsened economic conditions as a driver for a decline in housing prices, which can be an additional destabilizing factor in the financial sector. DNB also sees the (potential) decline in housing prices as a risk for banks. Therefore, DNB has decided to extend the countercyclical capital buffer until 2024.
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