“The prudence of the measures taken on mortgage loans is insufficient”

Chronic. If your bank’s prudence annoys you when you ask it for a loan, you will be even more so during your next mortgage application. The High Council for Financial Stability (HCSF), the institution responsible in France for preventing dysfunction of the financial system as a whole, decided on September 14, to make mandatory its recommendations for prudence to temper the distribution of mortgage loans. What may be binding for everyone is, however, collectively essential, because financial stability is at stake. And it is not the prudence of the measures taken that should annoy, but their insufficiency.

The recommendations thus become obligations had been issued in the midst of a health crisis, in January. From 1er January 2022, banks will therefore have to respect, under penalty of a penalty, a maximum “effort rate” of 35%, that is to say that the annual loan charges must not exceed 35% of income. before borrower tax. The maturity of the loan should be limited to twenty-seven years. However, 20 percent of new loans will be able to deviate from these limits.

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These rules are part of the so-called “macroprudential” policy which, the poor relation of the banking reforms launched following the financial collapse of 2008, meets, in addition to the hostility of the banking sector to any strengthening of regulation, a certain unpopularity, since it is a question of calming the ardor of the individuals requesting credits. Focused on the prevention not of risks at the level of each bank, but of “systemic” risk, it covers a whole battery of instruments, in reality little used, to prevent financial outbursts, the resulting crises and their economic consequences. disastrous.

Too modest action

These instruments fall into two parts. The first aims to act on the cycle of credit volume and real estate prices, which can be thought of as a great wave that unfolds, breaks and then falls back. Requiring banks to increase their own funds when the wave rises enables them to better absorb any losses during its downturn; Similarly, removing the most fragile borrowers, in this same phase, also smooths the tide and prevents situations of over-indebtedness. The second aspect consists of increasing the demands for caution from “systemic” actors, that is to say those who, by their size, their interconnections, their internationalization, would bring down the entire sector if they were to fall themselves. .

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