Sifi warns amortisation rules could hit consumption

Related Content Related Video Related Articles

The Swedish Investment Fund Association has warned that tougher amortisation rules from the country’s financial services regulator Finansinspektionen could lead to a slump in consumption as borrowers cut back on their spending.

The Assocation’s view comes in response to FI’s “Proposal for new rules on requirements for amortising property loans”, which have been  developed by the regulator to reduce systemic risk from a slump in consumption linked to any future downturn in the economy.

However, the Association said that it “fears that it could have the opposite effect”.

“Having a low level of borrowing against the property, at the same time as accessible savings capital is lacking, does not result in the security that FI is seeking for households in preparation for a downturn. The Association’s view is that amortisation and savings should be discussed together.”

It is not the case that the Association is against amortisation per se: it sees the amortisation of loans as a good thing, but it is against individuals being forced to save because, it says, it fears that such rules hit the wrong groups. It also points to FI’s own data suggesting that voluntary amortisation payments have increased significantly.

Implementing tougher amortisation requirements would, for example, make it harder for households to access their first property, make it more difficult for growing households to access larger properties, and make it more difficult for older people to access more suitable property, the Association argues.




Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

Read more from Jonathan Boyd

Close Window
View the Magazine

You need to fill all required fields!