World Bank2014-01-082014-01-082013-03https://hdl.handle.net/10986/16526The 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.en-USCC BY 3.0 IGOACCOUNTINGAGENCY PROBLEMAMORTIZATIONARREARSASSET CLASSASSET MANAGEMENTASSET MANAGERSASSET PORTFOLIOASSET PRICEASSET PRICESASSET QUALITYAVAILABILITY OF CREDITBACKED SECURITIESBAILOUTBALANCE SHEETBALANCE SHEETSBANK BONDSBANK LENDERSBANK POLICYBANKING SECTORBANKING SYSTEMBONDBOND PAYMENTBONDSBORROWERBORROWER BEHAVIORBROKERSBULLET REPAYMENTSBUSINESS CYCLEBUSINESS CYCLESCAPITAL ADEQUACYCAPITAL ALLOCATIONCAPITAL BASECAPITAL CONSTRAINTSCAPITAL FLOWSCAPITAL GAINSCAPITAL INFLOWSCAPITAL MARKETCAPITAL MARKETSCAPITAL REQUIREMENTSCASH FLOWCASH FLOWSCENTRAL BANKCENTRAL BANKSCOLLATERALCOMMERCIAL BANKSCONFLICT OF INTERESTCONSUMER CREDITCONSUMER PROTECTIONCORPORATE BONDSCORPORATE DEBTCREDIT ENHANCEMENTCREDIT GUARANTEECREDIT HISTORYCREDIT LINESCREDIT RISKCREDIT RISKSCURRENCY DEPRECIATIONCURRENCY RISKCURRENT ACCOUNT DEFICITDEBTDEBT CRISISDEBT INSTRUMENTDEBT INSTRUMENTSDEBT ISSUEDEBT OBLIGATIONDEBT OBLIGATIONSDEBT OUTSTANDINGDEPOSITSDEVALUATIONDOMESTIC MARKETSEMERGING MARKETSEXCHANGE RATEFAIR VALUEFINANCIAL CRISESFINANCIAL CRISISFINANCIAL INSTABILITYFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTFINANCIAL MARKETSFINANCIAL RISKFINANCIAL SHOCKSFINANCIAL STABILITYFINANCIAL STATEMENTSFINANCIAL STRESSFINANCIAL SYSTEMFINANCIAL SYSTEMSFORECLOSUREFOREIGN CAPITALFOREIGN CURRENCYFOREIGN CURRENCY LOANSFOREIGN EXCHANGEFOREIGN EXCHANGE RISKSFOREIGN LENDERSGLOBAL BANKINGGLOBAL ECONOMIESGROUPS OF LENDERSHOLDINGHOME OWNERSHIPHOMEOWNERSHIPHOST COUNTRYHOUSEHOLD WEALTHHOUSING FINANCEINCOME TAXINFORMATION SYSTEMINFORMATION SYSTEMSINSURANCE COMPANIESINSURANCE PRODUCTSINTEREST RATEINTEREST RATE RISKINTERNATIONAL CAPITALINVESTMENT FUNDSINVESTMENT OPPORTUNITIESIRREGULAR INCOMESISSUANCELENDERLENDERSLENDING CYCLELENDING INTEREST RATESLEVEL OF INTEREST RATESLEVEL OF RISKSLIABILITYLIENSLIFE INSURANCELIQUIDITYLIQUIDITY CRISISLIQUIDITY RATIOLIQUIDITY RATIOSLIQUIDITY RISKSLOANLOAN DEFAULTSLOAN MARKETLOAN OFFICERSLOAN PERFORMANCELOAN PORTFOLIOLOAN PORTFOLIOSLOAN PRODUCTSLOAN REPAYMENTLOAN TERMSLOCAL BANKSLOCAL CURRENCYLOCAL LENDERSMACROECONOMIC CONDITIONSMARKET DATAMARKET DEEPENINGMARKET DEVELOPMENTMARKET DEVELOPMENTSMARKET INFORMATIONMARKET INFRASTRUCTUREMARKET INSTRUMENTMARKET INSTRUMENTSMARKET INTERMEDIARIESMARKET INTERMEDIARYMARKET LIQUIDITYMARKET PARTICIPANTSMARKET PRACTICEMARKET SHAREMARKET STABILITYMARKET STRUCTURESMARKET SURVEILLANCEMATURITYMATURITY MISMATCHESMORTGAGEMORTGAGE FINANCEMORTGAGE LOANMORTGAGE LOANSMORTGAGE MARKETMORTGAGE MARKETSMORTGAGESNATIONAL BANKNON-PERFORMING LOANNON-PERFORMING LOANSNPLOPEN ECONOMIESPARTICULAR DEBTPAYMENT OF PRINCIPALPENSIONPENSION FUNDSPOLICY RESPONSEPORTFOLIOPORTFOLIO ALLOCATIONPORTFOLIO MANAGEMENTPORTFOLIO PERFORMANCEPREPAYMENTPRIVATE CREDITPRIVATE CREDIT BUREAUSPROVISIONING RULESPRUDENTIAL REGULATIONSPRUDENTIAL SUPERVISIONPUBLIC MARKETREAL ESTATE INVESTMENTREAL ESTATE INVESTMENTSREAL ESTATE LENDINGREGULAR PAYMENTSREGULATORY FRAMEWORKREPAYMENT CAPACITYREPOREPO TRANSACTIONSRESERVERESERVE REQUIREMENTSRESIDENTIAL MORTGAGERETURNSRISK AVERSIONRISK FACTORSRISK MANAGEMENTRISK PROFILESAVINGS SCHEMESSHARE OF CREDITSHARE OF INVESTMENTSHAREHOLDERSHAREHOLDERSSMALL BUSINESSSOLVENCYSOVEREIGN DEBTSOVEREIGN GUARANTEESOVEREIGN RATINGTAXTAX TREATMENTTOTAL DEBTTRADINGTRANCHESTRANSACTIONTRANSPARENCYTURNOVERUNDERDEVELOPED CAPITAL MARKETSUNDERLYING ASSETSUNDERLYING MORTGAGEUNIVERSAL BANKSVALUATIONVALUATIONSWorld Bank10.1596/16526