ARMENIA STUDIES EU COUNTRIES EXPERIENCE IN MORTGAGE CREDITING SPHERE

YEREVAN, October 23 (Noyan Tapan). The existence of an efficiently
functioning mortgage market bears evidence of the public’s trust in
the government and business circles of a given country. Kenneth
Munther, the European Director of the Armenian-European Economic
Policy and Legal Advice Center (AEPLAC), expressed this opinion during
the October 22 discussion on the subject ” The EU Experience in
Mortgage Market Development” at the AEPLAC. According to him, the
purpose of the discussion is to present to Armenia the tendencies of
mortgage market development in the EU countries. According to the
Central Bank Chairman Tigran Sargsian, Denmark’s experience in this
sphere is of great importnace to the Armenian side. Among the EU
counries Denmark is in the first place in terms of mortgage credits’
share in GDP. According to the CB Chairman, the first steps are being
taken for establishing the mortgage market in Armenia, and it is
extremely important to select the right model. According to Ole Bus
Henriksen, former Director General of the European Commission and
Advisor to Denmark’s Mortgage Banks Association, the mortgage
crediting concept varies greatly in the EU countries. For example, in
Italy and France mortgage crediting is implemented by commercial
banks, in Great Britain and Austria – by the organizations set up with
this aim, while in Denmark and Germany – by mortgage banks. In Denmark
credits are given on condition that real estate is the security. When
providing a credit, the mortgage bank issues financing bonds, which
are registered in its balance. This gives an additional value to the
bond since it is secured by the bank’s own financial resouces.