Y os dejo ya tranquilos con Suecia con otro artículo sobre la posición de FI (Inspección de Finanzas sueca)
https://www.svd.se/a/8Qa5jW/ingen-hjalp-fran-fi-fortsatta-amorteringskrav-nar-borantan-stiger
FI's message: No help for indebted households
Forget reduced amortization requirements! Even if interest rates rise at record speeds, Finansinspektionen has no plans to come to the rescue of indebted households.
These were double messages sent out from the Swedish Financial Supervisory Authority (FI), which on Tuesday presented this year's first report on the stability of the financial system.
On the one hand, the authority says that it realizes that households are under pressure when interest rates rise at the same time as their homes fall in value. In part, the situation facing households is now tougher than during the crisis of the 1990s, when interest rates on mortgages rose from 7 to a maximum of 15 per cent.
- It was a doubling, but then the debts were also much lower than today. Now we are talking about the interest cost can be tripled. In that sense, we are seeing a fairly sharp tightening, says FI's CEO Erik Thedéen to SvD after the press conference.
But even if individual households risk being hit hard if the interest rate rises from just over 1 per cent to up to 4 per cent in a short time, FI still sees no threat to the financial system. It is only at an interest rate of 7 percent that FI believes that some households will find it difficult to manage housing costs.
- We believe that quite a few households, even in a deep downturn, will go into personal bankruptcy and thus stop paying their interest. But there are very many households that will reduce their consumption, says Erik Thedéen.
Finansinspektionen points out that for several years now they have been warned that low interest rates will not last forever. Erik Thedéen points out, among other things, the criticized rules that say that a household must pass a "stress test" with an interest rate of 6 percent to get a loan.
- Many have claimed that the discount rate was far too high, that it excluded people who wanted to borrow more. We should be very happy that they are there. This means that households have raised their finances to cover 6 percent interest.
FI has a tool that could mitigate the effect of rising interest rates and that is to remove the so-called amortization requirement. But Erik Thedéen is not prepared to mitigate or abolish the requirement to help households cope with rising interest rates.
- We have a situation when the Riksbank raises the interest rate to tighten the economy. Then it would seem strange if another authority, Finansinspektionen, chooses to ease borrowing costs to compensate to some extent for the necessary interest rate increases that the Riksbank is now implementing, he says.
Is there still a scenario where you are forced to reconsider your attitude?
- We have already done it once. It was before the pandemic, but it was an exceptional situation where a number of economists warned of a GDP race of 5 and even 10 percent. Now most economists believe that we can slow down the growth rate. We still have growth and a strong labor market.
Already in April, housing prices in the country's largest housing market, Stockholm, began to turn downwards, according to the analysis company Valueguard. That decline continued in May, according to figures published by Danske Bank on Tuesday. The fall in May was as much as 3 percent, according to the bank.
It's not just negative, according to FI's chief economist Henrik Braconier.
Sharply falling house prices would create problems for the most indebted households. But basically, it is healthy that the housing market is corrected, he said during the press conference.
High housing prices are not in themselves good for the economy. When housing prices become lower, more people can enter the housing market and you do not have to take on as much debt. (### NO SHIT SHERLOCK)
What worries FI right now, however, is not a crash in the housing market but financial stress at the most mortgaged real estate companies. The companies with the highest loans may find it difficult to cope with rising interest rates.
It is primarily a problem for the companies themselves and the banks that have lent money to them, but in the long run, a crisis for the real estate sector can also spill over to the rest of the economy.
- If the banks suffer large credit losses, they will try to look after their house. We have seen during other financial crises that this leads to a sharp credit crunch. It risks lowering the Swedish economy and it could contribute to increased unemployment, says Erik Thedéen.
