Riksbank voices concern

Falling house prices and a sharp decline on the stock market could pose a serious shock to the economy, warns the Riksbank in its latest financial stability report. Indebtedness in the household sector has increased since June to an average quota of 175%.
The mandate for macroprudential policy of the Financial Supervisory Authority (Finansinspektionen) should be clarified as soon as possible, as well as further necessary measures to manage households’ indebtedness, urge Stefan Ingves, the Riksbank governor and Kasper Roszbach, head of the financial stability department.
“Although asset prices have partly declined recently the Riksbank’ analysis shows that current valuation of Swedish equities is high by historical standards, and therefore implies an elevated risk of a fall in equity prices,” states the report.