Financial stability: Bundesbank sees three main risks for German banks
The risks to the financial system are increasing. The central bankers were particularly surprised by current figures on the high debt from private mortgage loans.
Die Bundesbank warns of three primary risks to German banks' financial stability, including rising credit risks, elevated valuations on financial markets, and risks in the real estate market. The influential central bank official, Michael Theurer, expressed concern during the introduction of the Financial Stability Report in Frankfurt on Thursday.
He emphasized the need for the financial system to prepare for future challenges. Theurer highlighted the uncertain geopolitical climate, high valuations in financial markets, and increasing national debts as significant risks. He was also surprised by new data on private home mortgage financing, which revealed that borrowers are taking on substantial debt to purchase properties.
While the risk to the housing market had previously decreased, recent numbers have raised concerns. The Federal Bank now warns that 40% of loans issued in the second quarter of 2026 had a loan amount equivalent to 90% of the property's value. In 10% of these cases, the loan amount even exceeded the property's market value.
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
