Publication:
Regulation of Foreign Currency Mortgage Loans : The Case of Transition Countries in Central and Eastern Europe

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dc.contributor.authorDübel, Hans-Joachim
dc.contributor.authorWalley, Simon
dc.date.accessioned2013-03-26T18:34:14Z
dc.date.available2013-03-26T18:34:14Z
dc.date.issued2010-12
dc.description.abstractThe current financial crisis has had a major impact on the financial sectors of the Central and Eastern European (CEE) region. The impact has been exacerbated in many cases by the presence of foreign currency mortgage loans. The risk is both for the borrower, who has to make loan repayments in a currency different from that of the income he or she is generating, and for the banks, who need to fund themselves in a foreign currency. This study seeks to determine whether foreign currency mortgage loans really represent a major risk to all systems where they are present and then to assess what measures have been taken to deal with it. The optimal regulatory response will be appropriate for the macroeconomic context and also the consumer needs and best interests. A complete ban on the foreign currency product class appears appropriate for low-inflation economies, where consumer benefits from the product are low and the risk of speculation and has sent demand higher. Within that subset, fiscal support and other steps to further develop funding markets and improve affordability are likely to be required to help support local currency products. Also, these are the economies most likely to access the Euro in the near future, with limited exchange rate risk. Examples are Poland or the Czech Republic. For higher inflation economies facing choices of de-dollarization on one hand and possible imminent access to Eurozone on the other, foreign currency mortgages are likely to remain a part of the product menu for the near future. The challenge is to design a combined support and regulation strategy that creates a fair risk sharing arrangement between consumers and lenders and limits lender liquidity risks.en
dc.identifierhttp://documents.worldbank.org/curated/en/2012/12/16357477/regulation-foreign-currency-mortgage-loans-case-transition-countriesbrin-central-eastern-europe
dc.identifier.doi10.1596/12943
dc.identifier.urihttps://hdl.handle.net/10986/12943
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectAMORTIZATION
dc.subjectBALANCE SHEET
dc.subjectBANK INTEREST RATE
dc.subjectBANK LENDING
dc.subjectBANK LIQUIDITY
dc.subjectBANK MARKET
dc.subjectBANK REGULATION
dc.subjectBANKING SECTOR
dc.subjectBANKING SECTOR ASSETS
dc.subjectBANKING SYSTEM
dc.subjectBANKING SYSTEMS
dc.subjectBOND ISSUANCE
dc.subjectBOND ISSUE
dc.subjectBOND ISSUERS
dc.subjectBOND MARKETS
dc.subjectBORROWER
dc.subjectBORROWING COSTS
dc.subjectBRANCH NETWORK
dc.subjectBROKER
dc.subjectBROKERS
dc.subjectCAPITAL BASE
dc.subjectCAPITAL FLOWS
dc.subjectCAPITAL GAIN
dc.subjectCAPITAL GAINS
dc.subjectCAPITAL INFLOWS
dc.subjectCAPITAL MARKET
dc.subjectCAPITAL REQUIREMENT
dc.subjectCAPITAL REQUIREMENTS
dc.subjectCAPITALIZATION
dc.subjectCASH FLOWS
dc.subjectCDS
dc.subjectCENTRAL BANK
dc.subjectCENTRAL BANKS
dc.subjectCOLLATERAL
dc.subjectCOLLATERAL REQUIREMENTS
dc.subjectCOMMERCIAL BANK
dc.subjectCOMMERCIAL BANKS
dc.subjectCONSUMER CREDIT
dc.subjectCONSUMER GOODS
dc.subjectCONSUMER LOANS
dc.subjectCONSUMER PRICE INDEX
dc.subjectCONSUMER PROTECTION
dc.subjectCONTRACTUAL SAVING
dc.subjectCONTRACTUAL SAVINGS
dc.subjectCREDIBILITY
dc.subjectCREDIBILITY PROBLEMS
dc.subjectCREDIT BUREAU
dc.subjectCREDIT DEFAULT
dc.subjectCREDIT DEFAULT SWAP
dc.subjectCREDIT EXPANSION
dc.subjectCREDIT HISTORIES
dc.subjectCREDIT MARKET
dc.subjectCREDIT MARKETS
dc.subjectCREDIT RISK
dc.subjectCURRENCY BOARD
dc.subjectCURRENT ACCOUNT DEFICITS
dc.subjectDEBT
dc.subjectDEBT CRISIS
dc.subjectDEBT LEVELS
dc.subjectDEBT OUTSTANDING
dc.subjectDEBT SERVICE
dc.subjectDEBT SERVICING
dc.subjectDEBTS
dc.subjectDEFAULT RISK
dc.subjectDEFAULTS
dc.subjectDEMAND-SIDE FACTORS
dc.subjectDEPOSIT
dc.subjectDEPOSITS
dc.subjectDEVALUATION
dc.subjectDEVALUATIONS
dc.subjectDOLLAR BOND
dc.subjectDOLLAR BOND MARKETS
dc.subjectDOMESTIC CURRENCY
dc.subjectDOMESTIC INTEREST RATES
dc.subjectEMERGING MARKET
dc.subjectEMERGING MARKETS
dc.subjectEUROBOND
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATES
dc.subjectEXTERNAL DEBT
dc.subjectFEE INCOME
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL MARKET
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL STRESS
dc.subjectFISCAL DEFICIT
dc.subjectFIXED EXCHANGE RATE
dc.subjectFIXED INTEREST
dc.subjectFIXED INTEREST RATES
dc.subjectFLEXIBLE EXCHANGE RATE
dc.subjectFOREIGN BANK
dc.subjectFOREIGN BANKS
dc.subjectFOREIGN CURRENCY
dc.subjectFOREIGN CURRENCY LOAN
dc.subjectFOREIGN CURRENCY LOANS
dc.subjectFOREIGN CURRENCY RISK
dc.subjectFOREIGN DEBT
dc.subjectFOREIGN EXCHANGE
dc.subjectFOREIGN EXCHANGE RISK
dc.subjectFOREIGN INDEBTEDNESS
dc.subjectFOREIGN LENDER
dc.subjectFOREIGN LENDERS
dc.subjectFOREIGN MARKET
dc.subjectGRACE PERIODS
dc.subjectGROSS DOMESTIC PRODUCT
dc.subjectHOLDINGS
dc.subjectHOME FINANCING
dc.subjectHOST COUNTRY
dc.subjectHOUSING FINANCE
dc.subjectINCOME GROWTH
dc.subjectINFLATION
dc.subjectINFLATION RATE
dc.subjectINFLATION RATES
dc.subjectINSTITUTIONAL DEVELOPMENT
dc.subjectINSTRUMENT
dc.subjectINSURANCE
dc.subjectINSURANCE PRODUCTS
dc.subjectINTEREST RATE
dc.subjectINTEREST RATE DATA
dc.subjectINTEREST RATE DIFFERENTIAL
dc.subjectINTEREST RATE DIFFERENTIALS
dc.subjectINTEREST RATE PAYMENTS
dc.subjectINTEREST RATE POLICIES
dc.subjectINTEREST RATE RISK
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL FINANCIAL INSTITUTION
dc.subjectINTERNATIONAL FINANCIAL STATISTICS
dc.subjectINTERNATIONAL MARKETS
dc.subjectINTERNATIONAL SETTLEMENTS
dc.subjectINVESTMENT BANKS
dc.subjectINVESTMENT VEHICLE
dc.subjectLACK OF TRANSPARENCY
dc.subjectLENDER
dc.subjectLENDERS
dc.subjectLEVEL OF DEBT
dc.subjectLEVEL OF INTEREST RATES
dc.subjectLEVEL OF RISK
dc.subjectLIQUID MARKETS
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectLIQUIDITY CRISIS
dc.subjectLIQUIDITY PROBLEMS
dc.subjectLIQUIDITY RISK
dc.subjectLIQUIDITY RISKS
dc.subjectLOAN
dc.subjectLOAN BALANCE
dc.subjectLOAN MARKET
dc.subjectLOAN PRODUCT
dc.subjectLOAN PRODUCTS
dc.subjectLOAN RATES
dc.subjectLOAN REPAYMENT
dc.subjectLOAN REPAYMENTS
dc.subjectLOAN VOLUMES
dc.subjectLOANS TO INDIVIDUALS
dc.subjectLOCAL BANK
dc.subjectLOCAL BANKS
dc.subjectLOCAL CURRENCIES
dc.subjectLOCAL CURRENCY
dc.subjectLOCAL LENDER
dc.subjectLOCAL LENDERS
dc.subjectMARKET COMPETITION
dc.subjectMARKET DEVELOPMENT
dc.subjectMARKET INDICES
dc.subjectMARKET INTEREST RATES
dc.subjectMARKET LIQUIDITY
dc.subjectMARKET PRACTICES
dc.subjectMARKET SHARE
dc.subjectMARKET SHARES
dc.subjectMATURITIES
dc.subjectMATURITY
dc.subjectMAXIMUM MATURITY
dc.subjectMONETARY POLICIES
dc.subjectMONETARY POLICY
dc.subjectMONEY MARKET
dc.subjectMONEY MARKET RATE
dc.subjectMORTGAGE
dc.subjectMORTGAGE BOND
dc.subjectMORTGAGE BONDS
dc.subjectMORTGAGE FINANCE
dc.subjectMORTGAGE INTEREST
dc.subjectMORTGAGE INTEREST RATE
dc.subjectMORTGAGE INTEREST RATES
dc.subjectMORTGAGE LOAN
dc.subjectMORTGAGE LOANS
dc.subjectMORTGAGE MARKET
dc.subjectMORTGAGE MARKETS
dc.subjectMORTGAGES
dc.subjectNATIONAL BANK
dc.subjectNONPERFORMING LOAN
dc.subjectNPL
dc.subjectOUTSTANDING LOAN
dc.subjectPAYMENT DEFAULTS
dc.subjectPERSONAL LOANS
dc.subjectPORTFOLIO
dc.subjectPORTFOLIO PERFORMANCE
dc.subjectPORTFOLIOS
dc.subjectPROBABILITY OF DEFAULT
dc.subjectREAL EXCHANGE RATES
dc.subjectREAL INTEREST
dc.subjectREGULATORY FRAMEWORK
dc.subjectREPAYMENT
dc.subjectREPAYMENT PERIOD
dc.subjectRESIDENTIAL MORTGAGES
dc.subjectRISK FACTORS
dc.subjectRISK MANAGEMENT
dc.subjectRISK OF DEFAULT
dc.subjectRISK PROFILES
dc.subjectRISK SHARING
dc.subjectSAFETY NET
dc.subjectSAVINGS BANK
dc.subjectSAVINGS BANKS
dc.subjectSHORT-TERM INTEREST RATE
dc.subjectSTATE GUARANTEES
dc.subjectSWAP MARKET
dc.subjectSWAPS
dc.subjectTAX
dc.subjectTAX BENEFITS
dc.subjectTAX DEDUCTIONS
dc.subjectTAX INCENTIVES
dc.subjectTRANSACTION
dc.subjectTRANSITION COUNTRIES
dc.subjectTRANSITION ECONOMIES
dc.subjectTRANSITION ECONOMY
dc.subjectUNIVERSAL BANKS
dc.subjectVARIABLE RATE
dc.titleRegulation of Foreign Currency Mortgage Loans : The Case of Transition Countries in Central and Eastern Europeen
dspace.entity.typePublication
okr.date.disclosure2012-06-11
okr.date.doiregistration2025-05-07T11:04:23.962412Z
okr.doctypeEconomic & Sector Work::Other Financial Sector Study
okr.doctypeEconomic & Sector Work
okr.docurlhttp://documents.worldbank.org/curated/en/2012/12/16357477/regulation-foreign-currency-mortgage-loans-case-transition-countriesbrin-central-eastern-europe
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.guid383871468336712836
okr.identifier.externaldocumentum000425970_20120611114431
okr.identifier.internaldocumentum16357477
okr.identifier.report69382
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/06/11/000425970_20120611114431/Rendered/PDF/693820RSC0P1130tgage0loans0Jan02011.pdfen
okr.region.geographicalEurope
okr.region.geographicalEastern Europe
okr.sectorHousing finance
okr.sectorFinance
okr.themeFinancial and private sector development :: Regulation and competition policy
okr.themeFinancial and private sector development :: Standards and financial reporting
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicBanks and Banking Reform
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.topicPrivate Sector Development::Emerging Markets
okr.topicFinance and Financial Sector Development::Access to Finance
okr.unitNon-Banking Financial Inst - WB (FCMNB)
okr.volume1 of 1
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