The Federal Financial Supervisory Authority (Bafin) sees increased risks for banks and consumers in one out of every seven real estate loans. Mark Branson stated in Frankfurt that the proportion of poorly secured loans for residential properties in new business is comparatively high. "We view this critically," said Branson, as these loans pose a heightened loss potential for banks and could also be problematic for consumers.
Branson did not rule out supervisory measures, emphasizing, "The risky new loans of today must not become the problem loans of tomorrow." Uncertainty in global politics and rising inflation fears, particularly in connection with the Iran conflict, have recently led to higher loan interest rates. At the same time, real estate prices are rising, prompting many consumers to secure acceptable terms quickly.
Bafin also warned of a growing threat from cyber risks. Branson pointed out that the number of attacks on companies' IT infrastructure is increasing, and artificial intelligence (AI) is being used more frequently to identify and exploit vulnerabilities. "New AI applications can find and even exploit many weaknesses in IT systems. And they do so very quickly," he explained.
To address these challenges, Bafin is strengthening its oversight of cyber risks and providing additional resources for examinations at financial companies. Recently, the Federal Ministry of Finance warned about the risks posed by novel AI models like "Claude Mythos," which could exacerbate the cyber threat landscape.
