Littérature scientifique sur le sujet « Mortgage loans – Government policy – Europe »

The subject of the researchis the availability of mortgage as a credit resource for investment funding. The relevance of the problem is due to the development of the mortgage credit lending in the country. The policy of the Central Bank of Russia (CBR) and the Russian Government aimed at combating inflation and planned reduction of the key rate created favorable conditions for establishing acceptable bank rates on mortgage loans, which significantly raised the mortgage demand over the past few years. The research shows that Russian commercial banks have reduced mortgage rates and are offering refunding of previously issued mortgage loans, which demonstrates the confidence of the banking sector in the government and economic stability at the macro level. At the same time, the easy access to home mortgage lending can lead to a “financial bubble” problem on the Russian banking market and, moreover, to deterioration of the borrowers’ solvency, and, therefore, loan default.The purpose of the researchwas to examine the current affordability of mortgage as a source of credit resources for investment funding and develop recommendations for improving this process. The paperconcludesthat the government policy of economic and financial stabilization through inflation combating measures and maintaining the key rate by the CBR at the level acceptable for economic growth should be continued. At the same time, the transition from the participation finance to the project-tied system of housing construction financing can possibly increase the loan interest burden on developers and affect the price per square meter for the final buyer. The main factors contributing to the reduction of mortgage rates are the planned reduction of the key rate by the CBR and low inflation rates, the program of the Government subsidies to the mortgage market as well as the increased supply of low-income housing by developers.

The issues of state support of mortgage lending in Ukraine as a tool to stimulate the housing market, expand the opportunities of a wide range of citizens to meet housing needs and ensure the stable development of the national economy are considered. The fragmentation of the state housing policy and various instruments of state support for housing market participants are noted. Emphasis is placed on the significant unrealized potential of the construction sector, whose contribution to the domestic economy is three times smaller than the European average. The state and dynamics of the housing stock of Ukraine, the development of which remains highly sensitive to changes in the economy, are analysed. The problem of inaccessibility of mortgage lending for the general population is emphasized, which is mitigated both by market decisions of banks to reduce real mortgage rates and government initiatives to introduce and improve programs for affordable loans and housing. The practice of state programs in the housing market is analysed and the preservation of problems of their effective implementation is noted, including limited and instability of financing, the ambiguity of participation conditions, narrow target orientation, the inconsistency of responsibility of program participants. The peculiarities of the current mortgage lending are determined, among which the increase of new mortgage loans, the dominance of agreements on the secondary market, the limited number of mortgage lending banks, the provision of mortgage loans for a short period. New government initiatives to stimulate mortgage lending are considered, among the positive aspects of which is the priority of reducing the % of loan servicing, harmonization of relevant regulations, clarification of the procedure for participation. It is proposed to apply a systematic approach to the development of state support programs, which will be based on priorities by stimulating the growth of incomes and solvency of broad sections of citizens and the involvement of innovative developers in programs.

Securitization of Assets is a tool in the asset-liability management of banks and financial institutions to tide over the liquidity and other risks and also to supplement income by way of profit on sale of loans. Housing finance sector is one area where securitization is in practice and government has identified National Housing Bank as a facilitator for providing guarantee. This paper focuses on development of securitization in the US and Europe where it has diversified from a mortgage loan phenomenon in the 70’s into non-mortgage based loans giving rise to Asset Based Securities (ABS). It also brings out the impediments and constraints in the way of realising the potential of ABS in India. The growth of securitization in India has been affected mainly due to the non-development of the debt-market. The onus of developing and popularising the asset based securities in India lies on the merchant banker.

Abstract Using loan level data on mortgage loans originated by Dutch banks during 1996 to 2015, we analyse the determinants of the incidence of non-performance. We find that both the originating loan-to-value ratio (OLTV) and the debt-service-to-income ratio are significantly positively associated with the probability of non-performance. The results suggest that mortgages with government-loan-guarantees perform better. Moreover, several mortgage loan and borrower characteristics, such as the (interest-only) loan type and the underwater status of the borrower, increase credit risk. Our model predictions suggest a novel policy implication: in order to avoid acceleration of non-performance probabilities, the OLTV-limit should be set to about 70–80% for uninsured mortgages, and to about 90% for those with mortgage insurance.

Regional shocks are an important feature of the US economy. Households' ability to self-insure against these shocks depends on how they affect local interest rates. In the United States, most borrowing occurs through the mortgage market and is influenced by the presence of government-sponsored enterprises (GSE). We establish that despite large regional variation in predictable default risk, GSE mortgage rates for otherwise identical loans do not vary spatially. In contrast, the private market does set interest rates which vary with local risk. We use a spatial model of collateralized borrowing to show that the national interest rate policy substantially affects welfare by redistributing resources across regions. (JEL E32, E43, G21, G28, L32, R11, R31)

Policymakers and leaders usually fail to grasp a sound lesson from the eco- nomic hurdles and crises countries face. This paper, thus, is intended to review and articulate the causes and effects of the global financial crisis, and how the Ethiopian monetary policy reacted and mitigated the crisis. The data for the analysis were collected from various sources including IMF, World Bank, National Bank of Ethiopia, and research articles from 2003 to 2019. The review reveals that even during the crisis in 2009, Ethiopia was among the top five fastest-growing countries in the world by an average of 10.5%, which is twice the average growth of Sub-Sahara African countries (5 %). It had become the seventh-largest economy in Africa and the 69th in the world with a GDP PPP of 118.2$ Billion as of 2013. Some of the main reasons for the con- tinued growth of the country amid crisis could be the desynchronization of the country’s financial market with the international financial market, an insig- nificant share of mortgage loans in domestic financial sector services, and high-level government-led infrastructure investment coupled with China’s economic alliance. However, the significant effect of the crisis was observed in the country’s exports, remittance, and Foreign Direct Investment (FDI). To shun the related inflationary effect, the government increased the minimum deposit interest rate, reserve, and liquidity requirements, and reinstated the credit restrictions. Also, the immediate alert was given to commercial banks to give proper attention in managing credit risk and reducing non-performing loans to below 5% and overdraft facilities. Given the above-mentioned facts, the monetary policy measures were effective to stabilize the economy & sus- tain the growth. In the end, the offshoots & setbacks of the unsynchronized financial market, government-led investment & fettered mortgage loans are addressed, and the way forward is marked out.

The article dwells upon one of the most essential needs and benefits of the population – providing their own housing. Most young people are unable to solve housing problems on their own, so government support is significant to them. The issue of creating appropriate conditions that will increase the level of housing for the population is still relevant today. Theoretical and practical results of the study were obtained using the following methods: synthesis, analysis of evaluation methods, logical generalization. The works of many domestic scientists are devoted to the research of the problems of the state housing policy, among which: V.O. Omelchuk, V.B. Averyanov, M.F. Holovaty, P.I. Shestopalov, E.A. Sokolovskiy, E.O. Bublyk and others. The article analyzes the state and identifies the main features of the implementation of state programs of youth housing loans. Insufficient state funding for these programs, the constant growth of the number of citizens who need the state to ensure appropriate social living standards. All this encourages the search for new ways to improve the availability of real estate financing systems. One of them may be affordable mortgage loans. This will allow to effectively develop, in addition to housing programs for youth soft loans, a socially oriented mortgage market. Proposals have been made for the provision of affordable mortgage loans, depending on the level of solvency of the population, which will solve critical social problems of both young people and other categories of citizens. The opportunity to get their own housing in the future will increase the level of protection of vulnerable social groups, which in turn will encourage people to live and work in Ukraine.

The Korean government has tried to change the structure of residential mortgages in Korea from the short-term variable-rate non-amorting loans to the long-term fixed-rate amorting loans since the early 2000’s. This study examines he borrower’s net yield from that new type of loans, which is defined as the difference between the lender’s yield out of the borrower’s repayment and the borrower’s yield from the expected gain on the portion of housing equity funded by cosnumer. The main hypothesis tested is that the borrower’s net yield will be affected by the time of loan origination and the level of mortgage interest rate charged because the future fluctuations of housing values and that of market interest rates are expected to be key determinants. The results confirm the hypothesis in that borrower’s net yields show positive or negative values according to the time of loan start, the level of fixed loan rates, or home regions. The results documented can offer a useful information as to the financial consumers’decision on loan amount and the timing of loan application considering the housing and mortgage market condition, which in turn can provide policy implication to regulating the maximum loan-to-value (LTV) ratio regulations.

Depending on the economic situation, real estate policies have been announced with the goal of stabilizing real estate or revitalizing the economy. Before implementing real estate policies, effective operation and evaluation of government policies are essential. Real estate exhibits different regional variations due to its unique location fixity, and as a consumer and investment good, it is a commodity that is affected in a complex way, such as liquidity, supply, macroeconomics, and psychology. Real estate policies vary by tax policies such as holding tax and capital gains tax, and housing finance regulations (LTV, DTI). From this point of view, there is a need for a tool that can analyze the comprehensive policy effects including various types of real estate policies of the government. In this study, the available variables among the macroeconomic variables of the real estate market macroeconomic model designed on the premise of the ripple path following the implementation of real estate policies and the apartment sales transaction price index in the metropolitan area and nationwide, which is a proxy for apartment houses, were set as variables and analyzed through multivariate analysis. Analyze dynamic variations between variables. The purpose of this study is to examine the effect of housing finance regulation on housing mortgage loans in the national and metropolitan areas among real estate policies and the effect of tax policies and mortgage loans on apartment house prices (apartment sale price index) among real estate policies. We would like to focus on analyzing the effectiveness of the policy.

Depending on the economic situation, real estate policies have been announced with the goal of stabilizing real estate or revitalizing the economy. Before implementing real estate policies, effective operation and evaluation of government policies are essential. Real estate exhibits different regional variations due to its unique location fixity, and as a consumer and investment good, it is a commodity that is affected in a complex way, such as liquidity, supply, macroeconomics, and psychology. Real estate policies vary by tax policies such as holding tax and capital gains tax, and housing finance regulations (LTV, DTI). From this point of view, there is a need for a tool that can analyze the comprehensive policy effects including various types of real estate policies of the government. In this study, the available variables among the macroeconomic variables of the real estate market macroeconomic model designed on the premise of the ripple path following the implementation of real estate policies and the apartment sales transaction price index in the metropolitan area and nationwide, which is a proxy for apartment houses, were set as variables and analyzed through multivariate analysis. Analyze dynamic variations between variables. The purpose of this study is to examine the effect of housing finance regulation on housing mortgage loans in the national and metropolitan areas among real estate policies and the effect of tax policies and mortgage loans on apartment house prices (apartment sale price index) among real estate policies. We would like to focus on analyzing the effectiveness of the policy.

Defence date: 30 April 2014
Examining Board: Professor Sven Steinmo, European University Institute (Supervisor) Professor Pepper Culpepper, European University Institute Professor Peter Englund, Stockholm School of Economics Professor Gunnar Trumbull, Harvard Business School.
Do nations learn from their financial crises? In addressing this question, this dissertation explores whether politicians, supervisors and bankers change their preferences towards financial markets when they recognize they have made significant mistakes in the recent past. It also asks whether such recognition of failure leads to a process of change in rules, policies and institutions, in different national contexts. In addressing this broader theoretical question, the dissertation focuses on the mortgage credit markets in advanced capitalist economies. Challenging the conventional approaches in political science and financial economics, it shows that the longitudinal and cross-sectional variations in mortgage credit markets can best be explained with reference to nations' different experiences of financial crisis. Borrowing insights from learning theory in political economy and public policy analysis, it argues specifically that those nations (i) that had severe financial crises in their recent past and (ii) that have coordinative institutions and elites, are more likely to draw lessons from their mistakes, and to change their policies, in order to avoid similar asset bubbles and financial crises in the future. This dissertation adopts a multi-method approach in examining the role of learning in the evolution of mortgage credit markets. A significant part traces the history of mortgage credit and financial crises in three countries, from a comparative perspective. Stressing a comparison between two institutionally similar countries, Sweden and Denmark, the dissertation shows how differences in the severity of crises may yield opposite outcomes in elite perceptions toward financial stability, and how they explain the differences in policy and market outcomes. On the other hand, comparing Sweden to Britain -two countries with similar crisis history but with different institutions- it stresses the positive role of coordinative institutions and coherent elites in translating the crisis experience into actual policy and institutional change. In addition to the comparative-historical analysis, the econometric parts of dissertation show that the inferences drawn from three cases can be generalized to a sample of 19 OECD countries. The results indicate that the countries with a negative experience of financial crisis in the early 1990s are more likely to have smaller mortgage markets in comparison to other countries, and that this effect is stronger in countries with coordinative economic and policy institutions.

碩士
中華科技大學
經營管理研究所
102
In recent years, excessive rising house prices lead to the rationality of the transactions in the housing market. In particular, the development of luxury house market and behavior of the investors are driven by reference index of high housing price. The central bank adopted High-Priced Real Estate Policy in series of control policies for housing market. In this paper we explore the impact of the policy on mortgage loans of lenders. Our analysis includes the effect of mortgage credit decision factors in the results of the loans, and the compare of bank loans and lenders application. Finally, the impact of mortgage loans of luxury house and the investors in implementation of the policy. The evidences indicate that the credit factors are different by lenders and house condition in implementation of the policy. Also, the different of bank loans and lenders application. It’s important that mortgage audit for bank, including financial structure and debt payment of lenders, and collateral quality. The results of policy effect. They mean that follow-up mortgage costs are not increase for borrowers in implementation of the policy. The conclusion that mortgage audit is short-run impact in implementation of High-Priced Real Estate Policy. The evidences also indicate that the Policy bring a lot of impact for investors and non-investors. In particular, they have mortgage payment pressure in long-term periods. The investors are still not limited investment in the housing market. The non-investor has more stringent lending than the investors.

This chapter explores the emergence of ‘credit policy’, which more or less completely replaced ‘monetary policy’ as a key concept among experts and politicians. The term implied a shift in focus from aggregates that had previously been at the core of central bank activity—money, liquidity, and interest rates, as a means to control inflation and output—to loans facilitating specific types of economic activities. Credit policy mainly became a process for regulating aggregate lending and allocating the credit to various sectors of the economy. When starting to conduct credit policies, the authorities needed both a formal and informal system for regulating and allocation of loans, and some principles for prioritizing between potential credit customers. Both challenges came to engage government ministries, while Norges Bank sought to find a role in the implementation and management of the emerging system. In practice, Norges Bank became the government’s bank, as part of its key policy apparatus. The central bank governor, Gunnar Jahn, wanted another policy and a freer role but adapted to the new reality that was forced upon Norges Bank. When he stepped down in 1954, Norges Bank was among the least influential of the central banks in western Europe.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.