Czech National Bank's mortgages recommendations to become law
The government is backing a move that would strengthen the Czech National Bank's control over the mortgage market. At the moment, the CNB sets down guidelines that banks operating in the Czech Republic are expected to follow when setting in their mortgage policy. Assuming the government is able to push its initiative through Parliament, the CNB's guidelines on mortgage lending would become legally binding. The government sees this as an important step in avoiding excessive debt in the private sector, which can have a disruptive impact on the health of the financial sector. For the most part, domestic banks follow the CNB's guidelines. But the institution has no real power over foreign banks or non-bank lenders.