By Nicole Lundeen
The outstanding volume of foreign denominated loans to private
households in Austria has decreased, the country's banking
regulator said Wednesday.
At the end of the second quarter, the outstanding volume was
35.6 billion euros ($44.59 billion). Adjusted for exchange rates
this was EUR3.7 billion less than a year earlier. On the quarter,
the volume has sunk 3.7%, the Austrian Finance Market Authority
said. Since the FMA imposed a stop on new foreign-denominated loans
in the fall of 2008, the volume has shrunk by 25.3%, the regulator
said.
Foreign-denominated loans, especially mortgages payable at term
with a payment vehicle, were particularly popular in the Alpine
country before the start of the euro-zone debt crisis. Most of the
loans were denominated in its neighbor's currency, the Swiss franc.
As the Swiss franc appreciated against the euro in response to
investors looking for a safe haven, the risks of such loans and the
payment vehicles became more apparent. Hungary also faced similar
problems, though to a much larger extent than Austria.
Currently, foreign-denominated loans make up 27% of the total
loans to private households in Austria, with 93% of the loans
denominated in Swiss franc, with the rest almost entirely
denominated in Japanese yen, the FMA said.
Write to Nicole Lundeen at nicole.lundeen@dowjones.com