Although the Bauspar system is a very robust and simple system that is well-suited for developing and transitional countries, the system’s implementation should be carried out after having established some economic and legal preconditions:
It is important that a first macroeconomic stabilisation has occurred and that, in particular, inflation rates have declined to under 10% preferably. In any case, they should clearly show a downwardly trend. In the case of high inflation rates people have no incentive to save regularly and, thus, the Bauspar system is doomed to failure. Of course, saving in stable foreign currencies is possible in theory; however, creating a system that discriminates savers who are not paid in foreign currency – most likely the poorer majority – should not be focused on for social reasons. Furthermore, an economic stabilisation creates confidence and belief in a more prosperous future, it increases salaries, fosters employment and stimulates people’s disposition to save.
In terms of the legal background, as a start, it is essential to establish a situation that guarantees the rule of law. Moreover, it is necessary to build up well-functioning institutions and an economically dimensioned administrative organisation. Proprietary rights should be feasible, guaranteed and traceable. Bausparkassen should be subject to the national banking law and to the national supervisory authority for credit institutions. In our experience and according to many experts the implementation of a special Bauspar Act does increase the system’s success considerably. All countries that have successfully adopted the Bauspar system have also implemented a Bauspar law similar to the one that exists in Germany. Many of them have also build up a special reserve fund for deposits that helps to create confidence in the system’s safety. In case there is still no functioning national credit bureau, introducing one together with the Bauspar system is a very good opportunity – have a look at the reasons!
EFBS press release: EFBS reaffirms criticism of Capital Markets Union
OEE Newsletter of March 2015: "Savings in times of lowest interest rates – savings culture at stake? Some thoughts on the present and future of savings"
EFBS press release: Plans for new Green Paper jeopardize sustainable investments
EFBS press release: Zehnder re-elected as Managing Director
EFBS press release: IUHF 100th anniversary
EFBS press release: Consideration of low risk models under the Deposit Guarantee Schemes’ Directive
EFBS press release: Board of the EFBS re-elected
IUHF press release: Zehnder leads the world federation IUHF
EFBS press release: 50th anniversary of the EFBS
EFBS press release: EFBS welcomes the measures of safeguard proposed in the report of the Liikanen-Group
EFBS press release: European Bausparkassen welcome the result of the vote on the Mortgage Credit Directive
EFBS press release: Mortgage Credit Rules are Counterproductive
EFBS press release: European Commission‘s plans will adversely affect mortgage finance mechanisms