October 18, 2016
Sir, I refer to FT Special Report on Property Europe October 18.
I wonder has anyone of the contributors to this report, or anyone else in FT for that matter, tried to figure out how much of the property values in Europe derives from the distortion produced by bank regulations?
Info: For the purpose of deciding the capital requirements of banks Basel II (and III) set a risk weight of 35% for when banks finance residential housing, and one of 100% for when banks finance the “risky” SMEs and entrepreneurs that are to help home buyers to find the jobs that will allow the house owners to pay their mortgages and the utilities.
Sure that has to mean something for the current and for the future value of properties in Europe. How much? I haven’t the faintest! Except that it’s a lot!
PS. In fact regulators make banks finance the “safe” basements where the young can live with their parents, not the new “risky” jobs they need Per Kurowski