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ECB sees risk of housing bubbles in some countries

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.
Source: Reuters (Reporting by Balazs Koranyi Editing by Francesco Canepa)

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