The Financial Supervisory Authority (FME) has issued rules limiting the loan-to-value ratio of new residential mortgages in accordance with Article 25(1) of Act No. 118/2016 on Consumer Mortgages. In accordance with the Rules entering into force, the maximum loan-to-value ratio will be 85% of a property's market price. However, first-time home buyers may be granted loans of up to 90% of the market price in accordance with Article 25(2) of the Consumer Mortgage Act. The purpose of the rules is to maintain financial stability in light of growing imbalances in the housing market and to strengthen the resilience of lenders and borrowers with respect to the possibility of falling property prices.
The Financial Supervisory Authority (FME) Annual Report 2017 is now available in English. The substantial discussion in the Annual Report of the FME for 2017 primarily covers the period from 1 May 2016 until 30 April 2017. The report describes the main tasks of FME and, in particular, tasks of the supervisory divisions: On-site Inspections and Securities, Off-site Supervision, and Oversight. Furthermore, it discusses the situation and developments in the financial market in 2016.
On 28 June 2017, FME announced that the countercyclical capital buffer would remain unchanged in accordance with the recommendations of the Financial Stability Council on 20 June 2017.