RIKSBANK: H2 Financial Stability Report Pushes Back On Mortgage Proposals

The Riksbank's H2 Financial Stability Report, titled “Stability risks have declined in the short term but there is large uncertainty abroad” is here: 

• "Low pricing of risk can lead to a build-up of risk in the financial system and to unexpected events leading to large market movements"
• " There is still uncertainty about how the global economy will develop and the geopolitical risks have increased further. "
• "Weak public finances in the United States and many other major countries also pose a risk to global financial stability".

The following commentary appears to present some tension with a recent proposal to ease amortisation requirements (see here: https://marketnews.com/sweden-positive-house-price-impact-from-proposed-mortgage-policy-changes).

• “A loosening of macroprudential policy could lead to a resumption of rapid growth in both house prices and household debt, especially given that interest rates are now falling”.
• “Such a development would increase macroeconomic risks and, by extension, risks to financial stability”.
• “Improving the functioning of the housing market will primarily require fiscal and structural policy measures. Changing macroprudential policy in such a way that household indebtedness increases is not a sustainable solution”.