The Czech central bank (CNB) is ready to intervene if quick lending continues. The bank claims that the skyrocketing real estate prices seen in 2016 were not in line with economic fundamentals and household income growth. If credit standards stay loose and quick lending dynamics continue, CNB is prepared to adjust the standards and to increase the countercyclical capital buffer. In an article published on the CNB server, the bank’s vice governor, Vladimír Tomšík, wrote that there is a risk of creating a spiral between asset prices and mortgage loans. The countercyclical capital buffer is currently 0.5 percent.
