Mortgages are of
paramount importance in developed economies and financial
systems, as a means towards homeownership and also as one
of the main channels through which monetary policy is transmitted.
The Kok Report (see note
1 below) urged Member States to ‘unleash the dynamism
of financial markets’ and in particular it called for
a ‘reduction in the restrictions to more flexible mortgage
financing in a number of Member States’. The integration
of the European mortgage markets is considered a cornerstone
in the process of European retail financial market integration
which could bring benefits for customers and financial institutions.
However, local specificities prevent an integration of the
market in the short run. When seeking to overcome the barriers
to integration, it is generally recognized that policy makers
should avoid product harmonization that would lead to a reduction
of the range of products currently available. Some efforts
to improve transparency in the market have been carried out
through the implementation of the voluntary Code of Conduct
on Home Loans which standardizes information for consumers.
The European Commission recently released a Green Paper on
Mortgage Credit and a Report on costs and benefits of further
integration in the EU mortgage market.
