Deflating a Swedish bubble February 20, 2013 at 12:11 pm
Sweden has made a countercyclical move. Bloomberg tells us:
Sweden’s financial regulator says it’s ready to tighten restrictions on mortgage lending to stop banks feeding household debt loads after a cap imposed during the crisis failed to stem credit growth… The [Swedish] FSA is ready to enforce a cap limiting home loans relative to property values to less than the 85 percent allowed today, [director general of the FSA] Andersson said. Banks may also be told to raise risk weights on mortgage assets higher than the regulator’s most recent proposal, he said.
Coming as it does on top of Switzerland’s use of a countercyclical buffer, and noises from Australia on measures to deflate the housing bubble there, this is interesting. We are starting to see countercyclical regulatory policy in action.