Presented a small savings and loan interest package

Finance Minister Magnus Brunner and the head of the Banks and Insurance Division, Willibald Cernko, presented a small package this morning that is intended to catch the debate on sharply increased lending rates and measly savings rates.

Brunner initially made it clear that he had repeatedly urged that interest rates on savings should follow the key interest rates, which have risen sharply, more quickly. In order to heat up competition among the banks, they should report their savings interest on tied products (for six, twelve and 24 months) to the Oesterreichische Nationalbank, which will be published. Readers of the OÖ Nachrichten have known such an interest table for decades, which is published monthly in the OÖN with the current offers from the Upper Austrian market participants. In addition, federal treasury bills would be reissued. Brunner announced that these bonds should be able to be bought directly – without a bank deposit. A green federal treasury note with a term of three months that was offered yesterday, Tuesday, has an interest rate of 3.66 percent, Brunner gave an example of what interest rate level it could be.

With regard to variable-interest housing financing, Cernko prefaced his remarks with the fact that there are currently hardly any problems with the banks. “We don’t see in the data that a large number of borrowers are collapsing or in danger of collapsing under the interest burden.” But take it seriously. Therefore, the banks would not charge overdue notices or default interest for a period of twelve months to those borrowers who run the risk of not being able to service their home loans. “We have no interest in selling private properties, that’s not our business model,” emphasized Cernko.

In order to boost housing financing, the bank chairman also announced that the banks are working on a model to offer interest subsidies to young families for housing financing. This should have a volume of at least a high double-digit million amount. Small side swipe: “We see this as part of an overall package that also affects KIM.” The KIM refers to the regulation that provides for an equity share of 20 percent and a maximum repayment rate of 40 percent of the available net income for private real estate borrowers. This regulation was heavily criticized by the banks and was partly responsible for the sharp decline in new loans.