Swedish housing debt has risen after years of zero and negative interest rates. It sounded this week when the responsible authorities and the government last questioned the risks of the loan.
As part of the global management of central bank financial crises, one of them has become Riksbank The main contribution of the Swedish people is Swedish monetary policy with a record low key rate. In addition, Sweden's central bank has invited quantitative easingspecific forms of money printing that reduce credit rates even for longer maturities and – during the acute crisis – for urgent financing of the banking system, individual banks and central banks in the developing neighboring countries Latvia, Estonia and Iceland.
THE LOWEST ENVIRONMENT OF THE SWISS INTEREST IN 350 YEARS
The repo rate, which in practice provides the basis for the deposit and interest rates of the banking system and the equity market in Swedish kroner, is not north of 2% following the reduction in the financial crisis in December 2008. It has not been positive since October 2014, when it was first downgraded in Riksbank's current 351-year history. zeroand that was it negative from February 2015
Correctly or incorrectly, these interventions in the market environment (plus similar measures by large Western central banks, a low-interest boom and an expanding boom with low unemployment and tax cuts) contributed to an increase in interest-sensitive prices for Swedish households and Swedish commercial properties.
Recordings of records have been beaten at nominal and real square meter prices for homes (may have reached the end of 2017 with respect to the Valueguard HOX index in Sweden) and real estate. The same record level applies to, inter alia, the ratio of debt to household credit and low returns (risk premia) among real estate investors.
FINANCIAL CONTROLLERS VINING
Financial Stability Board is a forum where representatives of the government and financial regulators FSA, National Debt Service and Riksbank from 2013 meet to discuss Sweden's financial stability and measures against financial imbalances. Although the participating countries are very responsible for not removing the elements of Swedish monetary policy (minus the interest rate) and fiscal policy (interest rate / royalties deduction, reduced income and capital taxation) that have led to an increase of prices and debt behavior. Various hopes that it will be possible to reduce the risks by delay corrections here and there.
In the latest protocol of the June 10th meeting, a full assessment of all three financial regulators is repeated that the indebtedness of the commercial property sector and the sensitivity to interest rates are increasing, not least through increased capital market financing (read the bonds ).
In the same protocol, the Council is now proposing an imminent change in regulation in the form of banks, which must keep (still) more capital for lending commercial property (page 3). Theory about this: Even if the capital market is possible substituent For the banking system, the risks for banks are increasing when bonds are used and not supplementthat is to occupy a higher risk profile than the banking system can and can cope with (on the basis of increasingly stringent capital requirements). Bonds have a higher risk of refinancing, with real estate companies with credit problems in the bond line eventually becoming a problem for banks. And in the event of a larger, widespread decline in mortgage-priced property, the problems of banks are spreading rapidly, and regulators are soon becoming the problems of Swedish taxpayers.
As far as housing is concerned, the Council is not very new. The authorities agree that the government should try to implement structural reforms of both tax systems and housing policy. President of the Council of the Government, Minister of Finance Per Boulder (MJ) refers to the fact that the government reduces the tax audit, but with the addition that if housing taxes are to be changed, assessments of the effects of the combined measures, including macro-prudential measures introduced, must be made.
Moreover, both the authorities and the government agree that, not least in the media, there is an excessive picture of the negative effects of the measures FSA however, had to carry out the debt increase, including the depreciation requirements for new mortgages.
there FSA and National Debt Service Swedish banks' resilience remains satisfactory and a muted picture of the risk of large household debt Riksbank the body that is more concerned and sees unchanged high risks around household debt. Riksbank expresses the need for increased capitalization and liquidity in the banking system,
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- How does it really look like Swedish large banks' exposures to Swedish housing and real estate? Which big bank has the most?
- Where should the securities portfolio reduce its exposure to avoid sharing the possible account?
- Is it even possible, as a Swedish taxpayer, to avoid the risks to housing prices against the Swedish economy and the Swedish banking system?
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