Diario Oficial de la Unión Europea del 17/3/2022 - Comunicaciones e Informaciones
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Source: Diario Oficial de la Unión Europea - Comunicaciones e Informaciones
EN
17.3.2022
Official Journal of the European Union
C 122/1
I
Resolutions, recommendations and opinions
RECOMMENDATIONS
EUROPEAN SYSTEMIC RISK BOARD
RECOMMENDATION OF THE EUROPEAN SYSTEMIC RISK BOARD
of 2 December 2021
on medium-term vulnerabilities in the residential real estate sector in Germany ESRB/2021/10
2022/C 122/01
THE GENERAL BOARD OF THE EUROPEAN SYSTEMIC RISK BOARD,
Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation EU No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board 1, and in particular Article 32b and d and Articles 16 and 18 thereof, Having regard to Decision ESRB/2011/1 of the European Systemic Risk Board of 20 January 2011 adopting the Rules of Procedure of the European Systemic Risk Board 2, and in particular Article 18 thereof, Whereas:
1
The real estate sector plays an important role in the economy and its developments may have a material influence on the financial system. Past financial crises have demonstrated that unsustainable developments in real estate markets may have severe repercussions on the stability of the financial system and of the economy as a whole, which may also lead to negative cross-border spillovers. Adverse real estate market developments in some Member States have, in the past, resulted in large credit losses and/or had a negative impact on the real economy. Such effects reflect the close interplay between the real estate sector, funding providers and other economic sectors. Furthermore, the feedback loops between the financial system and the real economy may reinforce any negative developments.
2
These links are important because they mean that risks originating in the real estate sector may have a systemic impact. Financial system vulnerabilities tend to accumulate during the upswing phase of the real estate cycle. The perceived lower risks of, and easier access to, funding may contribute to a rapid expansion of credit and investment, together with an increased demand for real estate, which puts upward pressure on property prices. Furthermore, feedback loops between house prices and credit may result in potential systemic consequences. Conversely, during the downturn phase of the real estate cycle, tighter credit conditions, higher risk aversion and downward pressure on real estate prices may adversely affect the resilience of borrowers and lenders, thereby weakening economic conditions.
1 OJ L 331, 15.12.2010, p. 1.
2 OJ C 58, 24.2.2011, p. 4.
