Nearly , homes could benefit from the Code of Good Practices

Bank of Spain The Bank of Spain establish that. Households could benefit from the temporary Code of Good Practices that was approv in November last year. The objective is to alleviate the blow of interest rate increases to those families with mortgages that are at risk of vulnerability. In this way, it is clear from the Spring Financial Stability Report that the. Bank of Spain publish where there is a thematic chapter on the different Codes of Good Practices. This includes the first, which was in , and the other two, approv in November , on the one hand, one that reforms the one from years ago and, on the other, the new code for families at risk of vulnerability. The latter will only be valid until December

Why does it cover a smaller number of homes than the Government estimated?

During the presentation of the report, the general director of Financial Stability. Regulation and Resolution of the Bank of Spain that the number of households that can benefit from the. New Code of Good Practices is Ukraine Phone Number List different from what the Government in the month of November, since which that one million families could benefit from the measures. This is a number that covers around , more households than would have been able to benefit from the original version of the Code of Good Practice. The reason is that , in this case, different ranges of rate increases have been taken into account. . The capital that must be repaid by households that can benefit from the new Code would be approximately billion euros. This is about € billion more than under the conditions of the previous Code of Good Practice. On the other hand, around , households could benefit from the “more structural” mechanism of the code in its reformed version in November.

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The Code of Good Practices and its role in times of crisis

The Bank of Spain also explains that the experience of applying the. Code shows that these measures have a very important place as a mechanism for absorbing the consequences of crises. However, it serves a more limite function in Mexico Phone Number List normal cases. On the other hand, it foresees that the implementation of Royal Decree-Law implies a moderate positive effect. In the short term on consumption and the level of GDP activity . The reason is that the stimulus would be limite by the limit number of eligible mortgage holders. This is a number that would decrease even more if we consider the effective. Accessions that were made to the code. Also, it warns that the measures in November may generate costs for households, that is, a higher level of debt or lower access to credit in the future. In this regard, it makes it clear that they imply a higher level of household debt for a longer period of time, which includes increas interest expenses. In addition, it can generate sensitivity to possible rate increases in the future.

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