Result

2019

FI’s View on Preconditions for Mortgage-Based Business Activities

In Sweden, the traditional bank-based financing model for issuing and financing mortgages is currently being supplemented by models where mortgages are being financed in new ways, e.g. alternative investment funds (AIF).

FI Supervision 4: Survey of Funds of Funds

2019-01-15 | Reports Consumer Markets

FI has surveyed 25 funds of funds managed by 25 fund management companies and AIF managers. FI has scrutinised how the consumer is informed about fees and how the managers have reported their funds of funds’ objectives and performance.

2018

Higher interest rates test resilience

Low interest rates have contributed to high risk-taking, rising asset prices and increasing debt. Higher interest rates in the next few years could reduce risk-taking and thus dampen the build-up of risk. However, unexpectedly large interest rate fluctuations and uncertain global developments could also test the financial sector’s resilience. These are some of the conclusions Finansinspektionen (FI) draws in this year’s second report on the stability in the financial system. The report will be presented at a press conference today.

Stability in the Financial System (2018:2)

The economy continues to be strong, both in Sweden and globally, but it is now showing signs of a slow-down. Interest rates have been low for a long period of time, which has led to high risk-taking and rising asset prices. As a result, the risks in the financial system are elevated. The resilience in the Swedish financial system is satisfactory in general but continued high growth in debt fuelled by lending and investments related to residential property and commercial real estate require monitoring.

Work with sustainability is progressing – but there is still much to be done

FI is publishing today three reports on sustainability. The reports show that the work with sustainability is progressing on several fronts and that the industry’s own initiatives, where relevant, are working. But there is still a lot of work left to be done. FI is also publishing a follow-up report for the Government on FI's work with sustainability-related matters in 2018.

Finansinspektionen’s work in 2018 to contribute to sustainable development

FI has conducted a number of supervision activities related to sustainability at the same time as the organisation has been partly restructured and received additional resources. During the year, FI's work has focused on integrating sustainability-related matters into its ongoing supervision, a project that will continue and be intensified.

Preconditions for newcomers to the mortgage market

Sweden’s traditional bank-based model for granting and financing mortgage loans is challenged by new firms with alternative financing models.

Swedish loans for consumption

Most loans for consumption are small and have a high effective interest rate and a short maturity. Households with large loans represent the largest share of new lending, though, and the large loan segment is growing the fastest. Households with high income have the largest loans. Borrowers with mortgages normally have larger consumption loans than borrowers without mortgages. These are some of the results from FI’s mapping of consumption loans, Swedish Consumption Loans 2018.

Stability in the Financial System

The Swedish economy continues to be strong, and resilience in the financial system is satisfactory. However, a long period of low interest rates and strong growth has resulted in an elevated risk appetite, high asset prices and high debt globally, among Swedish households and on the commercial real estate market. The high level of indebtedness makes the financial sector more sensitive to shocks, and, if necessary, FI will take additional measures to strengthen the resilience.

Risks can build up when the economy is strong

The Swedish economy continues to be strong, and resilience in the financial system is satisfactory. However, a long period of low interest rates and strong growth has resulted in an elevated risk appetite, high asset prices and high debt. This makes the financial sector more sensitive to shocks, writes Finansinspektionen (FI) in the first Stability Report of the year, which is being presented today.

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