Real estate crisis: banks should not delay lending.

In the name of ensuring healthy financing for the French economy, particularly in providing mortgage loans, the financial sector of France, bolstered by rising interest rates, must continue its work, stated François Villeroy de Galhau, Governor of the Bank of France, on November 17.

“The level of refusals from banks, given equal risks, should not increase. Be clear, this level is not precisely defined, and this undoubtedly justifies a multitude of interpretations and suspicions. There is a common belief that it has risen,” noted the governor while speaking at the annual conference of the Authority for Financial Control and Risks.

The governor sees "no justification for this," as he believes that the profitability and liquidity of banks should not be an obstacle.

Mr. Villier Rykal de Gallo is urging banks and government authorities to "consider" the possibility of a peaceful resolution for "apparently viable mortgage loans that have been rejected," similar to what already exists for business loans.

The Governor of the Bank of France defends the regulations of the High Council for Financial Stability (HCSF), which have been criticized by bankers and limit the terms and amounts of loans in relation to household income, reminding that they have "fulfilled their mission" of preventing over-indebtedness and that there is flexibility in this matter.

The French Banking Federation (FBF) notes that "over time, the demand for consumer loans has significantly decreased due to rising interest rates [...], while housing prices and the supply of housing have remained stable." "Bank consultants are always available to their clients to find solutions and provide responsible lending in this complex and constrained area," assured the FBF, adding that the profession "certainly collaborates with government authorities to offer ongoing improvements, especially in this important area for the population."

For buyers, however, there has been an improvement: the maximum interest rate on loans will be 6.11% starting December 1 for loans of 20 years or more. Given the stabilization of nominal rates, this should not be a barrier for first-time homebuyers or those looking to become homeowners.