Low interest rates can be a good thing for a finance minister. They promote growth and investment and generally make voters happy.
But Wolfgang Schäuble, Germany’s finance minister, is worried about the spillover effects low rates on the real estate market.
“I think that we in part are seeing the first signs of a bubble forming,” he told the Handlesblatt in an interview.
Other top regulators are not so sure.
“The greater liquidity in the market is a risk factor,” said Elke König, the head of Bafin, the federal financial supervisory authority. But “right now,” she added, “there is no evidence that banks are significantly easing the conditions for lending. We do see a risk, but no sign of a bubble yet.”