Crisis of confidence threatening FSA chief

While property brokers are warning prices in Stockholm have already fallen by 15%, the issue of new tougher mortgage requirements is to be decided. On Monday the board of the Financial Supervisory Authority (FSA) is to make a decision, although director general Erik Thedéen has already said that he is prepared to go ahead with the proposal.

He has not only defended the proposal but accused critics of representing special interests and exploiting the uncertain market situation to postpone it.

The opposition has already stood against the proposal, so the government is alone. However, although formal approval from the Riksdag is not needed, it is not a good option for the government to make a decision that changes the rules of play on a rocky property market ten months before an election.

Annika Winsth, chief economist at Nordea, says that if the government opposes the new amortisation requirements, the judgement of the FSA is being put in question and Erik Thedéen ought to seriously consider whether he should remain in post.