Pfandbrief

Risk premiums for German Pfandbriefe - the long term perspective

Karsten Rühlmann

Karsten Rühlmann

Landesbank Baden-Württemberg

Risk premiums of German Pfandbriefe and Bunds in comparison

Uncertainties about the effects of the corona crisis are also affecting the risk premiums of German Pfandbriefe. As a result, there has been an increase of 15 basis points since the beginning of the year. In a long-term historical comparison with other crises, however, the spread premiums are still at a moderate level. In our opinion, it is highly probable that mortgage institutions will not be able to escape the consequences of an economic downturn either. In contrast to the financial crisis, however, there is currently no crisis in the banking sector, and the institutions are also significantly better positioned in terms of the capital and liquidity situation.

At just under 60 basis points, the spread to Bunds has also widened in recent weeks. But here too, the levels are comparatively moderate relative to the financial or sovereign crisis.