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Borg rejects call for mortgage-repayment law

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Borg rejects call for mortgage-repayment law
16:53 CET+01:00
Sweden's Finance Minister Anders Borg said Thursday that he is not in favour of forcing home owners to pay down their mortgages, outlined in a proposal by the Riksbank head that caused a stir on Tuesday.

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/

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