Governor HBija Jiri Rusnok defended the bank against the measures the central bank gradually introduced in the area of mortgage lending in recent months. "We are continuing our efforts to bring these recommendations into line with the law. In the future, there is a certainty that the market will be on the same ground," Rusnok said at the UniCredit Bank conference for 100 years in Czech banking and 150 years after the founding of Živnobank.
The reason for this is a level playing field. "We are able to implement it with the entities we oversee, or the bank. The world is changing, as is banking, and it is more likely that non-bank providers will also provide mortgages," Rusnok said. He added that the CNB did not primarily monitor the aspects of consumer protection.
"Looking at the banking sector, the mortgage accounts for about fifty percent of all the loans provided by banks," he added.
Rusnok described that the CNB began recommending mortgages to prevent an unhealthy 100 percent mortgage system being developed. Rusnok reiterated that mortgages should not be more than 90 percent in LTV, and only 80 to 90 percent of mortgages.
"At a time when real estate prices grow faster than other prices and salaries, the LTV indicator is not entirely convincing and one more instrument needs to be used. One of them is the debt-to-income ratio, the multiple annual income of the total household debt, where we recommend it nine times more than income. the indicator is the ratio of debt and net income, which we set to 45 percent. In five percent of cases, banks have the freedom to avoid giving recommendations and covering certain cases, "the governor added.
By amending the relevant CNB bill, it was submitted to the Ministry of Finance in July 2017, but the House of Representatives failed to discuss it before last fall. This summer, the Ministry again submitted a proposal.