Regarding borrower quality, it is imperative that banks ensure that mortgage holders are credit worthy and capable of withstanding income shocks. The propensity for banks to take risks can increase in a competitive market where they are trying to maintain/increase market share.
It is worth noting at this point that the significant and widespread mistakes made by  2  BIS central bankers’ speeches  (sub-prime) mortgage lenders in the US when assessing the credit worthiness of borrowers were not paralleled in the euro area and that write-offs on housing loans extended by euro area banks have remained low and broadly stable this year.