• Sweden edition
 

Swedes' borrowing increases at record pace

Published: 15 Nov 2010 12:36 GMT+01:00
Updated: 15 Nov 2010 12:36 GMT+01:00

Swedish households increased their loans from banks and housing credit institutions by 53 billion kronor ($7.72 billion) in the third quarter, the highest increase ever recorded for July to September, Statistics Sweden (SCB) reported on Monday in its latest savings barometer.

During this time, interest rates rose, with Sweden's central bank, the Riksbank, increasing the repo rate by 0.25 percentage points twice to 0.75 percent. However, the hikes did not deter Swedes from borrowing.

"One reason why loans continued to increase could be that there were strong incentives to buy a home before the household loan ceiling went into effect on October 1st," the agency said in a statement.

At the end of the quarter, the total volume of loans handed out by banks and housing credit institutions amounted to 2.37 trillion kronor.

At the same time, households continued to sell shares and equity funds in the third quarter even as the Stockholm Stock Exchange netted a 10 percent gain during the period.

A total of 4 billion kronor in shares and 3 billion kronor in equity funds were sold during the quarter, compared with 7 billion kronor of shares and 4 billion kronor of equity funds in the second quarter.

Despite the share sales, households increased their assets in shares by 49 billion kronor and equity funds by 12 billion kronor as a result of the growth in the stock market.

The stock market growth resulted in an increase of total household share wealth to 579 billion kronor at the end of the quarter, the highest value since the fourth quarter of 2007.

However, the levels are still far below the peak experienced In second quarter of 2007, when share wealth amounted to nearly 700 billion kronor.

In addition to equity funds, net purchases in other funds, including mixed funds and funds-in-funds, amounted to slightly over 20 billion kronor in the last six months, of which 2 billion kronor were purchased in the third quarter.

However, following sharp demand during the financial crisis, interest for bond and money market funds has weakened recently.

Bond and money market funds now consist of less than five percent of total fund assets, with households making net sales of bond and money market funds of less than 500 million kronor in the third quarter.

Separately, household financial savings, or transactions in financial assets minus liabilities, amounted to a 15 billion kronor shortfall in the third quarter, the lowest financial savings figure since the fourth quarter of 2006.

The low financial savings in the quarter resulted largely from a combination of households selling shares, equity funds and bonds and at the same time, increasing their loans during the quarter.

However, the net wealth of households, or financial assets minus liabilities, amounted to 3.26 trillion kronor, an increase of 158 billion kronor compared with the previous quarter.

Vivian Tse (vivian.tse@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

13:22 November 15, 2010 by miss79
of course things are getting expensives even kronor is getting stronger..tats why we need to loan from the banks..lol
16:01 November 15, 2010 by Nemesis
Borrowing getting out of control.

Where have we heard that before?

When is the crash?
16:17 November 15, 2010 by just a question
where have I heard that before?

We don't learn anything from another countries?

Why politicians never do anything to control the housing market?

At least is not Norway, they are right now the hardcore housing speculators.
22:00 November 15, 2010 by mikewhite
All they're doing is trying not to be a "threat to the global economy" - that's what good citizens Swedes are ...
00:51 November 16, 2010 by my5cents
Check out these YouTube videos;

search on;

Meltup

Hyper inflation nation

THAT will tell you what is REALLY going on in the US. We are headed for a crash and we are past the point of no return.

Prepare for battle, save your funds and get out of the US if you can. The clock is ticking
15:50 November 16, 2010 by Swedesmith
During the Great Depression, my great grandfather had his farm almost paid off and his neighbor owed more than his farm was worth. My great grandfather's farm was reposessed and his neighbor's was not.

It is best to owe nothing, but if you do owe, owe a lot.
Today's headlines
Sweden wants cruise missiles 'for defence'
Defence Minister Karin Enström. File photo: TT

Sweden wants cruise missiles 'for defence'

The Swedish government has announced plans to beef up its defence forces by fitting its fleet of Gripen fighter jets with long-range cruise missiles. READ () »

Swede of the Week
Sweden's oldest would-be MP: 'They promised I wouldn't get in'
Swedes vote in the 2010 elections. File photo: Dan Hansson/TT

Sweden's oldest would-be MP: 'They promised I wouldn't get in'

Gösta Arvedson, 89, is the oldest Riksdag candidate in Sweden, but our Swede of the Week explains that the Liberal Party (Folkpartiet) had to make some unusual promises for him to put his name forward. READ () »

Elections 2014
Most Swedes lack info ahead of EU vote
The Green Party is one of only two parties devoting their websites to the EU elections. Here campaign manager Emma Rung presents the party's posters. Photo: Leif R Jansson/TT

Most Swedes lack info ahead of EU vote

The majority of Swedes feel the country's political parties are not doing enough to inform them about the upcoming European Parliament elections. Only two of the eight parties have dedicated their homepages to the May 25th polls. READ () »

Fatal Norrköping Brawl
Local church tried to stop Norrköping murders
Swedish police on the scene following Monday's fatal brawl. File: TT

Local church tried to stop Norrköping murders

The Syrian-Orthodox Church in Ektorp had tried to quell tensions between two rival families just hours before bad blood spilled into a massive brawl and two brothers lost their lives. READ () »

JobTalk Sweden
'Foreigners don't need to show banks Swedish ID'
The bridge that connects Sweden to the European continent. File: L.E. Daniel Larsson/Flickr

'Foreigners don't need to show banks Swedish ID'

The Swedish agency that helps Europeans fight impediments to the EU principle of free movement has revealed an increase in complaints, including one from a foreign citizen unable to open a bank account in Sweden. READ () »

Eurovision 2014
Pig heart shatters in Sweden's Eurovision clip
Sanna Nielsen in the new clip. Photo: YouTube (screenshot)

Pig heart shatters in Sweden's Eurovision clip

Sweden's Eurovision hopeful Sanna Nielsen released the official video for the song Undo on Wednesday, a clip featuring leather, slow motion destruction, and a frozen pig's heart and some violence. READ () »

Software robot pinches Swedish flats in seconds
Swedish apartments. File: The Local

Software robot pinches Swedish flats in seconds

A Swedish landlord suspects that a property fixer has set up a software robot to sign up for new flats on the market within seconds, and is charging house hunters to use the service. READ () »

Swedish zoo fire 'kills only the spiders'
Photo: Johan Nilsson/TT

Swedish zoo fire 'kills only the spiders'

Twenty-five fire fighters were on hand on Wednesday night when a fire broke out in a southern Sweden animal park. The vast majority of the animals were unharmed, but the cluster of spiders wasn't so lucky. READ () »

Sweden Investor group posts sharp profit drop
File photo: Simon Cunningham/Flickr

Sweden Investor group posts sharp profit drop

Swedish investment giant Investor on Wednesday said its first-quarter profits slumped by a quarter, underlining Sweden's vulnerability to international instability. READ () »

Florida 'mystery knight' dies in Sweden
Michael Boatwright (R) and Medieval knight re-enactors.

Florida 'mystery knight' dies in Sweden

The "motel mystery" American who baffled US authorities by only speaking Swedish when he woke up from a coma last year has passed away, Swedish media reported on Wednesday. READ () »

RECEIVE OUR NEWSLETTER AND ALERTS
finest.se
Gallery
People-watching April 23
TT
Gallery
Inside the 850-year-old king's coffin
Features
Sponsored: South-eastern Sweden offers Öland beaches and more
Gallery
Swedish underwear shop puts staff in front of the camera
Gallery
IN PICTURES: The Local's Property of the Week - Täby
Sponsored: India+Sweden Week - India Unlimited
Features
Sponsored: India+Sweden Week - A film, food, and finance feast
National
University applications rocket to record high
finest.se
Gallery
People-watching April 18-20
TT
Society
Kids in Victorian garb mark Swedish Easter
Shutterstock
National
Swedish MP ordered chemtrail probe
Society
Swedish supermarket Ica pulls contested Easter commercial off air
Kungahuset
Society
Swedish royals set baptism date for princess
Advertisement:
finest.se
Gallery
People-watching April 16
Politics
Who's the prime minister's heir?
Alfie Atkins
Society
Are children's books the key to families integrating in Sweden?
National
'Sweden Dem protests cater to party's martyr image'
National
'Swedish research grants were fantastic, but now it's like Australia'
Society
Only in Sweden: The ten problems you'd never encounter elsewhere
National
Swedes stopped to take my picture, but didn't look me in the eyes
Business & Money
A swipe of the hand replaced cash and cards in Lund
YouTube
Features
Video: Oliver Gee finds out how to embrace The Swedish Hug
TT
National
Abba duo hints at reunion
Private
National
Flash mobs hug it out across Sweden
Stockholm School of Economics
Sponsored Article
Why a bachelor's degree is no longer enough
Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Blog Update: The Diplomatic Dispatch

28 October 15:16

The Green Growth Group Summit »

"Today on the 28 October in Brussels, a large group of key EU Ministers and business people, including UK Secretary of State for Energy and Climate Change Edward Davey, and Swedish Environment Minister Lena Ek, will meet to discuss green growth. They all have a stake in resolving a challenge which, although it is crucial..." READ »

720
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com