These harmonised standards will emerge from the cross-border sharing of experience, noting the best aspects of each national approach to banking supervision and adopting these for use at the European level. Second, European banking supervision makes it possible to effectively identify and manage cross-border problems. This is essential because large banks are usually active in more than one country.
Let me begin with the first two. The interest rates posted by your mortgage broker or set by the Bank are in nominal terms. To get the real interest rate, simply subtract inflation from the nominal rate. For example, if the nominal interest rate is 5% and inflation is stable at 2%, then the real interest rate is 3%. Why is this important?