German central bank warns against excessive application of Russian sanctions

central bank of germany criticized the country’s financial institutions for interpreting punitive measures against Russia too rigidly.

“We see here and there that the sanctions are outdated,” Joachim Wuermeling, a member of the central bank’s board, told the financial daily Handelsblatt on Wednesday.

Institutions should not, for example, exclude citizens of Russian origin simply for fear of violating sanctions, he said.

“Financial institutions must be careful to maintain a sense of proportion and not unintentionally disadvantage anyone.”

Regarding future financial risks, Wuermeling expressed concern about mortgages, which have become riskier for banks due to rising prices.

The market was becoming increasingly vulnerable, he said.

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Mortgages with a fixed interest rate for more than 10 years account for half of non-commercial mortgages in Germany.

“So in the midst of an interest rate recovery, banks would still have very low interest rate loans on their balance sheets for a few years, but would already have to pay higher interest rates for refinancing. “

The central bank reserved the right to adjust banks’ capital buffers if financial risks continued to grow, Wuermeling said.


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James R. Rhodes