Impacts of 2016 guidelines on mortgaging of homes

Analysis – November 2018 – No. 18

Authors Bentzen, Christian Sinding; Andersen, Henrik Yde; Hviid, Simon Juul
Subject Financial stability; Macroprudential policy; Denmarks Nationalbank´s analyses of financial stability; Housing finance
Type Analysis
Year 2018
Published 19 November 2018
Since the financial crisis, there has been increased focus on making the financial sector more resilient. One of the tools for achieving this objective is the Danish Financial Supervisory Authority's guidelines from 2016 on prudent credit assessment when granting housing loans in growth areas. These guidelines have made borrowers in growth areas borrow less than borrowers outside the growth areas, but the impact is modest. The modest impact may be due to slow implementation, scope for deviation from the guidelines and the fact that the guidelines were in line with best practice in the institutions.