Source of Funding: Federal Ministry of Finance (BMF)

Mandatary: KfW

Period: 2007 – 2008

Berlin Economics, in close cooperation with the Association of German Mortgage Banks (Verband deutscher Pfandbriefbanken, or vdp), advised the State Duma on the introduction of mortgage bonds. Along with a detailed legal consultation from the vdp, Berlin Economics compared the continental European mortgage bond system with the American system of “mortgage-backed securities”.

The comparison clearly showed that mortgage bonds are a much more robust instrument than “mortgage-backed securities”; accordingly, mortgage bonds held up much better in the 2008/2009 financial crisis.

Accordingly, our recommendation to the banking committee of the State Duma was to construct a Russian system based on the continental European model. The results were presented in bilateral meetings in ministries, as well as at a round table discussion in the State Duma.