• Sweden edition
 
Borg rejects call for mortgage-repayment law

Borg rejects call for mortgage-repayment law

Published: 17 Jan 2013 16:53 GMT+01:00
Updated: 17 Jan 2013 16:53 GMT+01:00

Stefan Ingves, head of the Swedish central bank, proposed that Sweden had to get to grips with the high level of household indebtedness.

One solution, he proposed, was to legislate so that loan takers have to make regular payment on the debt owed, rather than simply nipping away at the monthly interest rate payments.

SEE ALSO: Riksbank probes mortgage-repayment law

Borg was not impressed.

"I think we should follow the plan we have already outline," he told Svenska Dagbladet (SVD) newspaper.

"We need to increase the banks' capital reserves and review risk-weighting of housing loans."

He warned that a sudden political move could affect the housing market too drastically.

"We will be looking at how we make Swedish banks less dependent on foreign currency, which run the risk of currency rate fluctuations," Borg told SVD.

"Then we'll see how the households react. We need to tackle the indebtedness step by step."

TT/The Local/

Follow The Local on Twitter

Your comments about this article

20:05 January 17, 2013 by eurobloke
I would agree with Mr Ingves on the idea of mandatory mortgage payments. The growth of interest-only mortgages was one of the reasons why the British property bubble grew and then went pop. Finance Minister Borg should anyway take advice from such senior people, he may not agree or accept but heal to the information as needed.
21:36 January 17, 2013 by Mib
@eurobloke The reason that the UK property market crashed albeit softly in London and the suburbs and are typically worth more today than they were in 2007....was due to self certification and overstating incomes, speculators who bought too many properties and stretched too far believing the market would grow forever....a massive credit crunch in 2008 etc etc...greedy banks throwing money at peopl too cheaply ie. Today someone was sentenced to 7 years in jail for defrauding £750 million from banks!! What was the bank doing lending that amount without checks?. Sweden did not and does not have that type of property market. However as Borg stated, the banks need to increase their reserves and combined with a minimum 15% deposit rule and probably more regulations coming in, then it will be a better way than legislating for repayment mortgages at the moment in a delicate economy.

There has to be a fundamental change in thinking, by changing the rental laws to be allowed to charge market rates and a massive increase in building new homes which has to be a partnership between the Government and private property coampanies. Until that happens, property prices in prime cities like Stockholm will increase further as demand outweighs supply with pressure from a lack of rental property!
09:45 January 18, 2013 by skogsbo
a phased in repayment system seems logical. Banks slowly increased their reserves and reduce risk. The public slowly lower personal debt. No bad thing for either and the market doesn't feel the impact of full immediate implementation.
21:39 January 18, 2013 by smilingjack
Id never heard of the interest only system until being in sweden. then again australia has one of the worst pension / social welfare systems in the world. paid maternity leave started only a few years back and it is mnimal at best.

now I understand why there are so many new cars floating around stockholm. still with such a good publc transport system in stockholm why would you spend 700,000 kr to park it in the street?
Today's headlines
National
Chainsaw man destroys house in family feud
The man used a chainsaw to destroy most of the Lidköping home. Photo: Shutterstock

Chainsaw man destroys house in family feud

A man in central Sweden has gone on a rampage with a chainsaw after a family housing dispute took an unexpected turn. READ  

National
Man frames beggar with stolen tablet computer
The beggar was detained for almost 24 hours after the accusation. Photo: TT

Man frames beggar with stolen tablet computer

A man in southern Sweden has landed in hot water after he stole a tablet computer, gave it to a beggar, then reported her to the police. READ  

Stockholm 'sub hunt'
Sweden ready to use force to surface sub
The Swedish Armed Forces have sent out 200 troops. Photo: TT

Sweden ready to use force to surface sub

UPDATED: Sweden's military has announced that if it finds a suspect foreign vessel in the Stockholm archipelago, it is prepared to force it to the surface "with weapons if necessary". READ  

Stockholm 'sub hunt'
Sub hunt: 'There is something out there'
Former navy officer Bosse Linden in Vaxholm. Photo: Maddy Savage

Sub hunt: 'There is something out there'

Stockholm's archipelago is the focus of the biggest military operation in Sweden since the Cold War. The Local is in the region's capital, Vaxholm, to see what residents make of the drama. READ  

Presented by CurrencyFair
CurrencyFair: Why it pays when making overseas transfers
CurrencyFair co-founder Brett Meyers

CurrencyFair: Why it pays when making overseas transfers

Tired of losing money when you send cash back home? Join other expats in Sweden who avoid bank fees and hidden charges by sending money internationally with CurrencyFair, an online marketplace where secure transactions are faster and cheaper. READ  

European Union
Extremist saves Sweden Democrats' EU group
Sweden Democrat leader Jimmie Åkesson. Photo: TT

Extremist saves Sweden Democrats' EU group

The EU group that bound several Eurosceptic parties including the Sweden Democrats has been saved by an MEP from a far-right Polish group, just a week after it appeared to have crumbled, according to a UK press report. READ  

Stockholm 'submarine' hunt
Timeline: Mystery 'submarine' in Stockholm
Sweden's Armed Forces are out in force after reports of a foreign vessel in the Stockholm archipelago. Photo: TT

Timeline: Mystery 'submarine' in Stockholm

The world has had its periscope on Sweden since the Swedish military launched an extensive hunt for what is rumoured to be a damaged Russian submarine in the Stockholm archipelago. Here is the timeline of events so far. READ  

Business & Money
Profit leap for Swedbank
A branch of Swedbank in Malmö. Photo. TT

Profit leap for Swedbank

Swedbank has seen its profits rise higher than expected. READ  

New coalition
Sick pay U-turn from Sweden's new coalition
Stefan Löfven has changed his strategy on sick pay. Photo: TT

Sick pay U-turn from Sweden's new coalition

Small businesses won't face rising sick pay costs, following a policy reversal from Sweden's new coalition government. READ  

Stockholm 'submarine' hunt
Vessel hunt continues at 'full strength'
Minehunter HMS Koster takes part in the search in the Stockholm archipelago on Sunday. Photo: Marko Säävälä/TT

Vessel hunt continues at 'full strength'

The search for a suspected foreign vessel in the Stockholm archipelago continues with "full strength" on Tuesday morning, according to Sweden's armed forces. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
National
Sweden deploys troops over underwater threat
Gallery
People-watching: October 19th
TT
Society
QUIZ: How good is your Swedish?
Blog updates

19 October

Getting it (Blogweiser) »

"Follow Joel Sherwood on FB Few watch baseball in Sweden. This is excellent when your team loses..." READ »

 

17 October

Editor’s Blog, Oct 17th (The Local Sweden) »

"Hi readers, Here’s the whole week of news in just 60 seconds. The most-read story was about a..." READ »

 
 
 
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
National
A Touch of Scandinavia: Reindeer in the kitchen
Lifestyle
What's on in Sweden: October 17th - 24th
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Lifestyle
Sweden's The Bridge to become 'more Danish'
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
What's on in Sweden: October 10th - 17th
National
Stockholm is 'best' region for well-being
Gallery
People-watching: October 8th
National
Five facts to know about Patrick Modiano
Society
My Swedish Career: A French fashionista in Sweden
Society
Swede's anti-bully Facebook tale goes viral
Society
Have you seen Sweden's viral subway cancer campaign?
National
Isis: Swedes linked to Turkish prisoner swap
National
Should Swedes be banned from buying sex abroad?
Gallery
Fredrik Reinfeldt's leaving presents
National
Five Swedish TV shows you shouldn't miss
Gallery
A tool belt, a casserole, and a book. Fredrik Reinfeldt's parliament gifts
TT
Lifestyle
Top five winter festivals in Sweden
TT
National
Sami reindeer herders win mine reprieve
Gallery
Property of the Week: Gamla Enskede
Sponsored Article
How to catch the first lobster of the year
Politics
Ten new minister faces you should know
Tech
First womb transplant baby in world born in Sweden
Gallery
People-watching: October 5th
National
What's on in Sweden
National
Sweden rethinks Afghan translators' protection
Society
Interview with Geena Davis: 'I want to be in a Swedish movie'
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

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 Denmark

More news from Denmark at thelocal.dk

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

1,008
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
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN