Publication: Europe and Central Asia Housing Finance Crisis Prevention and Resolution : A Review of Policy Options

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World Bank
The objective of this paper, besides offering insight in the regional and global development and stability issues, is to initiate a dialog with housing finance market stakeholders on the course of action appropriate for their jurisdictions. The policy options presented in the paper are practical and implementable and should frame discussions between public and private housing finance market participants. It offers observations of the recent Europe and Central Asia (ECA) market developments and presents a menu of policy actions that should be considered by the mortgage regulators to address the current challenges and to better prepare for next cyclical events. The scope of the paper is on the mortgage finance in ECA region. Some of the policy measures discussed deal with the real estate market evolution- notably the market observatories- as the real estate market evolutions are intricately linked with the cyclicality of the mortgage credit (and with the broad business cycles) and this linkage should be analyzed and considered by the mortgage market stakeholders. The policy options discussed in this paper are: (a) interconnected; and (b) need to be tailored to the specific country circumstances. The paper is structured as follows: after an overview of ECA mortgage market characteristics, key elements of the post-2008 performance are discussed in details- Non-Performing Loan (NPL) and funding mechanisms evolution. A number of policy options that can be utilized in a crisis management and counter-cyclical context are suggested.
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World Bank. 2013. Europe and Central Asia Housing Finance Crisis Prevention and Resolution : A Review of Policy Options. © Washington, DC. License: CC BY 3.0 IGO.
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