Austrian FMA Sharpens Lending Rules for Foreign Currency Loans

Published: January 2, 2013; 18:56 · (Vindobona)

The Austrian Financial Market Authority changes the rules for banks which grant foreign currency loans.

Austrian FMA Sharpens Lending Rules for Foreign Currency Loans / Picture: © SW Umwelttechnik

Austria´s FMA underlines that foreign currency loans are no “suitable financial product for housing loans”. Since 2008, Austrian banks must not grant foreign currency loans to private individuals. Since then, the exposure was down by € 14bn.

However, according to FMA, the foreign currency volume in Austria is still “extraordinarily high”. As a result, there is a systemic risk potential, FMA warns and refers to IMF, EBRD and the World Bank. As a result, the minimum criteria for banks granting foreign currency loans were sharpened. Above all, the duty to provide information was enlarged.

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