2 nd Saint Petersburg International Mortgage Forum Bausparen in Europe Andreas J. Zehnder

t 4.Repayment phase 2.Savings phase 1. Contract conclusion 3.Loan disbursement The four stages of Bauspar contracts

Advantages of „Bausparen“ Subordinated mortgage Capital market – independent interest rates Planning reliability Flexibility Well understandable, simple and transparent Fostering stability and growth Smaller loan amounts possible Fostering savings rate and „economic financing“

Subsidy efficiency Subsidies based on loan interest tax deduction are –intransparent, –hardly calculable, –socially unfair and –increase loan amounts. Income dependent, earmarked premiums, in contrast, are –well ascertainable, –easily calculable, hence, transparent, –socially reasonable and –can be integrated into the Bauspar system easily.

The Bauspar system in Europe

The successful implementation of the Bauspar system in eastern Europe - examples Three Bausparkassen since 1992 Market share almost 60% More than 60% of all Bauspar customers conclude a second contract Very low default rate: 0,56% Positive economic side effects Every sixth Bauspar customer has a contract at the „Erste Bausparkasse“ (subsidiary of Schwäbisch Hall) 1. Slovakia

2. Czech Republic Bauspar system implemented in the early 90ies 6 Bausparkassen engaged More than loans had been allocated until 2003 ČMSS (subsidiary of Schwäbisch Hall) is the biggest Czech Bausparkasse Every fifth Bauspar customer saves at the ČMSS Strong growth of housing construction since 1995

3. Hungary Bauspar system implemented in 1997 Fundamenta Lakaskassza (subsidiary of Schwäbisch Hall) manages about 1 million contracts corresponding to about 3.1 billion Euros new contracts equalling 1.1 billion Euros concluded last year 50% increase !

3. Romania Latest market for Bausparen (subsidiary of Schwäbisch Hall founded in 2004) new contracts closed last year Total of currently contracts equalling 552 million Euros 42% increase !

Bausparen – internationally popular Czech Rep. Slovakia Hungary Romania India China Kasakhstan Slovenia Croatia Implemented since 1990 in: Currently discussed in: Baltic States Ukraine Belarus Aserbaidjan Armenia South Africa Nigeria Thailand Russia

V. M. Polterovich & O. J. Starkov: Bausparen may resolve the informational deficit in Russia –Bausparen works without credit history –Bauspar customers build up their credit history/credit worthiness by saving –Bausparen represents an opportunity and motivates –Information trading concerning creditworthiness fosters credit sector The implementation of a Russian Bauspar law makes sense and is desirable!

Thank you very much! Contact: Verband der Privaten Bausparkassen e. V. Klingelhöferstrasse 4 D Berlin Tel.: +49/+30/ Fax:+49/+30/ Web: