Central Bank may be given right to dictate mortgage loan conditions

The Czech National Bank may get extended powers in being able to dictate conditions for mortgage loans to banks, according to an amendment to the law approved in its first reading by the lower house on Friday.

At present the central bank only has the right to issue recommendations which are not binding, although they are generally adhered to. According to the bill’s proponents it is to lower the risk of potential losses and protect the resilience of the financial sector.

The proposed amendment was vehemently opposed by the Civic Democrats, the Pirate Party a TOP 09, who argued that it could make housing less accessible to young people.

It is now being reviewed by the Budget Committee in the Chamber of Deputies.