As things stand, this is particularly the case in the corporate bond and syndicated loan segment. 2. As for banks’ ability to bear risks, the picture is less clear. German banks today are better capitalised than they were just a few years ago, but their profitability remains weak. 3.
This is why the Financial Stability Review takes a particularly close look at the situation in the housing market – after all, this sector has often been the primary source of critical developments in the past. Mortgage lending in Germany is not a highly procyclical phenomenon. This is to be welcomed, since it dampens the risk of overvaluation from this side.