Photo: Fredrik Sandberg / TT.

Financial authorities worried over growing household debt

Sweden's government and financial authorities are looking at ways to tamp down growing household debt, Reuters news agency reports, as this Tuesday's meeting of the Financial Stability Council convenes.

Swedish household debt-to-income ratio has risen to above 170 percent, which is among Europe's highest, and the nation's white-hot property market shows no sign of cooling. The nation has seen borrowing jump and property prices triple here over the last 20 years.

"There is a fairly large consensus that household debt is a concern," Swedish central bank chairman Stefan Ingves said last week. "If households continue to borrow, we could end up with very big problems later on, and this is what we want to avoid."

Ingves has said tightening rules on mortgage repayments could help avoid future problems since right now only four in ten mortgage borrowers pay off their debt compared to nine in ten in the mid-1990s

In any case, officials are looking for ways to engineer a soft landing for the property market, Reuters reports.

"We have to do enough, but not too much," Swedish central bank member Martin Floden told the news agency. "We cannot continue with this rapid rise in house prices and debt for ever, we need to in some way stabilize the development."

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