Regulatory Alerts2019-06-27
Added · Updated
Recommendation of the European Systemic Risk Board on medium-term vulnerabilities in the residential real estate sector in Denmark
The European Systemic Risk Board recommends that Danish macroprudential authorities activate additional or tighten existing capital-based measures to ensure the resilience of credit institutions against systemic risks from residential real estate vulnerabilities. It further advises Danish authorities to closely monitor household indebtedness and house price overvaluation, activating or tightening borrower-based measures if risks increase, and to consider raising the legally binding minimum down payment requirement. Additionally, the Board recommends that Denmark review structural policies, such as rental market regulations and mortgage tax deductibility, to curb factors driving excessive household debt and house price growth.