PRAGUE, Sept 14 (Reuters) - The Czech National Bank (CNB) on Friday maintained its extra countercyclical capital buffer for banks at 1.50 percent after a series of increases to stem rapid credit growth.
A long period of record low interest rates and strong economy have driven up demand for household loans, especially for cheap mortgages during a housing boom.
Since July, banks have had to meet a 1.00 percent countercyclical capital buffer, which will grow to 1.25 percent from January and 1.50 percent from next July.
The Czech Republic is one of a handful of European countries where banks must set aside capital under this buffer used in times of excessive lending growth to safeguard against worse times.
The central bank has also introduced new recommendations which banks should follow for mortgage loans, including income requirements for borrowers that will come into effect next month.
A shortage of new apartments in recent years combined with cheap lending have contributed to home prices soaring, including a 58 percent rise for new apartments in Prague in the last three years. (Reporting by Jason Hovet)