Criticism of plans to give watchdog extra powers

The Ministry of Finance wants the Swedish Financial Supervisory Authority (Finansinspektionen) to be given additional macroprudential tools, but a number of bodies are critical of the plans.

The Trade Union Confederation, LO, believes a review of interest rate deductions needs to be made before the watchdog further restricts household borrowing, while the Swedish Construction Federation warns that a debt-to-income ceiling will make it harder for the young and immigrants to get a first step on the property ladder; a view which is shared by the Association of Swedish Real Estate Agents.

The Swedish Bankers’ Association believes Finansinspektionen’s proposed mandate is too broad and far-reaching but Sweden’s central bank, the Riksbank, welcomes the proposal, given that current regulation does not correct financial imbalances.