ECB sees risk of housing bubbles in some countries: Enria

Asset quality at euro zone banks is deteriorating and housing bubbles may be developing in several countries, European Central Bank supervisor Andrea Enria said on Thursday.

“While (non-performing loan) numbers still appear favourable, asset quality seems to be deteriorating,” Enria told the European Parliament’s committee on economic affairs. “We are also seeing a build-up of residential real estate vulnerabilities in some countries.”

He added that banks’ projections for soured credit may be overly optimistic and they must be cautious with releasing provisions.