Across Europe, banks are trying to figure out how to handle a growing risk lurking in residential mortgage portfolios: energy consumption.
In Germany, the bloc’s largest economy, it’s increasingly clear that many households are either unwilling or unable to devote funds to upgrading the energy efficiency of their homes. The German Bundesbank has already warned that failure to act may leave a substantial dent in property values, with knock-on effects for the wider economy. Deutsche Bank AG, meanwhile, says only a tiny fraction of its residential customers are currently eligible for green loans.
“All banks are facing the same…
