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Rising House Prices and Ultra‐low Interest Rates: A Recipe for a New Banking Crisis?
Author(s) -
Dombret Andreas R.,
Goldbach Roman
Publication year - 2017
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/ecaf.12244
Subject(s) - overheating (electricity) , interest rate , german , business , financial crisis , economics , recipe , financial system , monetary economics , macroeconomics , engineering , geography , archaeology , electrical engineering
Are overheating housing markets and rising interest rate risks becoming a breeding ground for yet another banking crisis? We assess these risks for the German case. We find that they are indeed building up and may very well form the basis for a new banking crisis – unless prevented through responsible banking decisions, supervisory guidance, and policy adjustments.