Liviu Voinea: Finance and housing in Central and Eastern Europe - a demand-side approach

Speech by Mr Liviu Voinea, Deputy Governor of the National Bank of Romania, at the Finance and Housing Panel, Bruegel Annual Meetings 2017, Brussels, 7 September 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

• In 2015, ESRB published the Report on residential real estate and financial stability in EU. In November 2016, a detailed assessment of countries with high vulnerabilities followed.
• AT, BE, DK, FI, LU, NL, SE, UK were identified as having medium term vulnerabilities on the Residential Real Estate (RRE) market. No CEE country was singled out.
• The ESRB methodology is based on the concept of "stretch", applied to households, collateral, and banks.
• Household stretch refers to vulnerabilities related to borrowers' indebtedness and ability to repay debt, as well as their capacity to maintain their consumption pattern. Main indicators: household debt % GDP, financial assets to debt, debt service to income.