Riksbank Warns Looser Demands on Borrowers Could Increase Risk
- Central bank sees stability risk in easing amortization rules
- Warnings come after government inquiry submits proposals
Residential and commercial buildings in Stockholm.
Photographer: Andrey Rudakov/BloombergThis article is for subscribers only.
Sweden’s Riksbank cautioned that loosening requirements on mortgage amortization could lead to increased stability risks, pushing back against a proposal intended to make it easier for first-time buyers to enter the housing market.
The warning from the central bank comes after a government-appointed inquiry advised that households be allowed to pay down less on mortgages exceeding 70% of the value of the home. The so-called macroprudential rules were introduced in the wake of the global financial crisis amid concern over rising house prices and ballooning debt.