November 14, 2024 08:40 GMT
RIKSBANK: H2 Financial Stability Report Pushes Back On Mortgage Proposals
RIKSBANK
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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”.
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