With some loans, a deterioration in quality can be seen.
(Photo: Reuters)
Frankfurt ECB chief banking supervisor Andrea Enria warns of a bubble in the real estate market. “We are seeing an increase in vulnerabilities in residential real estate in some countries,” Enria said on Thursday before the European Parliament’s Economic Committee.
By and large, the number of non-performing loans is still manageable, but the quality of the underlying assets seems to be deteriorating. The banks’ forecasts for bad loans may be too optimistic and he advised caution when dissolving risk provisions.
Enria had already said on Wednesday that some loans had deteriorated in quality. Overall, however, it painted a positive picture of the situation in the banking sector. The institutes have so far mastered the pandemic well.
More: Riskier than London and New York: Frankfurt is the world’s greatest danger of a real estate bubble
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