Regulatory Alerts2026-06-08
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Study: Improving Housing Quality: Potential and Limitations of Borrower-Based Measures
The study evaluates the adaptation of borrower-based measures (BBMs) to finance energy efficiency investments in housing without compromising financial stability. It analyzes three recent BBM relaxation cases in Slovakia, Hungary, and Latvia, concluding that these policy changes did not significantly affect banks' credit portfolio risk profiles or financial stability. Furthermore, the changes did not lead to a substantial increase in loans for energy-efficient investments, suggesting that BBMs should be combined with other policy measures to improve energy efficiency in the real estate sector.
08.06.2026.
Publications
This study examines how borrower-based measures (BBMs) can be adapted to provide additional funding for housing-related energy efficiency investments without jeopardizing financial stability objectives. First, it demonstrates that lower energy costs and higher housing prices resulting from renovation allow for the easing of borrowing constraints while simultaneously keeping credit risk indicators unchanged. The authors then focused on three recent BBM relaxation measures implemented in Slovakia, Hungary, and Latvia, and assessed their effectiveness by conducting a bank survey. It was concluded that these policy changes did not significantly affect the risk profile of banks' credit portfolios and thus did not impact financial stability. Moreover, these changes did not result in a significant increase in loans for energy-efficient investments. It is suggested that BBMs adjustments be combined with other policy measures to improve energy efficiency in the real estate sector.
The full text of the study is available only in English