ECB concerned over ‘problematic loans’
The European Central Bank has warned that Portugal is in a group of countries that are prone to “problematic loans”.
Increases in interest rates will affect families where mortgages are mostly at variable rates, as is the case in Portugal, Cyprus, Greece, Ireland, and Spain.
In an article on a financial stability report published on Tuesday, ECB economists believe that low income families are typically more vulnerable to defaulting on mortgages and other loans.
The vice-president of the ECB, Luís de Guindos is holding a virtual press conference today on the report,
Portugal is one of the countries whose banks may well have the most problematic loans because of default due to inflation and the increase in interest rates.
Banks in Portugal already had a higher percentage of default loans before inflation hit prices and the ECB began to put up interest rates.