06 December 2005

EFBS calls for liberalisation and mutual recognition of financial techniques on mortgage credits

The European Federation of Building Societies (EFBS) criticized that the harmonisation of European mortgage credit markets as envisaged by the Commission would result in a considerable cost increase and hardly measurable advantages to European consumers.

Referring to the study prepared by London Economics (LE) on the costs and benefits of a possible harmonisation, Managing Director, Mr. Zehnder, said that the authors of the study are right in assuming that differences in Member States’ national legislations represent the main obstacle to cross-border financing transactions. However, pointing out some of the shortcomings of the report, Mr Zehender underlined that „Progress in overcoming this problem is only possible through liberalisation, i.e. mutual recognition of financing techniques, as demanded by the EFBS for a long time already.“

“Further harmonisation measures at the EU level would not change anything about this” he added. For as long as such measures complied with the principle of minimum harmonisation – which was the case so far - Member States would be able not only to retain or adopt rules deviating from this principle, but also to require „imported“ financial-service products to be completely adapted to their national law systems with reference to the principle of the general good.

Housing market expert of the LBS Group, Mr. Hamm, stated that the European-market reality had been totally misunderstood. „The British real estate property price bubble can barely be referred to as a blue-print for Europe“, Mr. Hamm said.

EFBS does not share the LE Study’s assumptions in terms of consumer protection. „It is, no doubt, contrary to the mentality of most continental European borrowers to finance 100 percent or more of the price of property acquisition projects on a credit basis without owning capital resources on a reasonable scale“, said Mr. Zehnder.

Press release
Association of credit & other institutions promoting & supporting housing finance
www.efbs.org',WIDTH, 300, SHADOW, true, FADEIN, 300, FADEOUT, 300, STICKY, 1,DURATION,3500)" onmouseout="UnTip()");">EFBS Pospaper mortgage credit.pdf' target='_blank'>Position paper

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