Sweden’s financial watchdog said banks in the largest Nordic economy will probably need to hold extra capital to reflect households’ record debt burdens.
Sweden’s financial regulator says it’s ready to tighten restrictions on mortgage lending to stop banks feeding household debt loads after a cap imposed during the crisis failed to stem credit growth.
As Sweden’s households continue to add to their record debt burdens, the central bank and the financial regulator are marking out their territories.
Sweden’s financial regulator may force banks to apply tougher risk weightings to their mortgage assets in an effort to restore investor trust.
Sweden will introduce new measures to stop the nation’s record household debt burden from growing further should steps already taken prove inadequate, Financial Markets Minister Peter Norman said.
Sweden’s financial regulator rejected government and central bank calls to raise risk weights on mortgage assets above the 15 percent already agreed on in the latest clash between policy makers and the watchdog.
"The effect on consumption is not that big-- we count on about 0.5 percent decrease of consumption."
- Martin Andersson on Nov 11, 2014