S&P says Swedish mortgage plan is positive
Standard & Poor’s has followed Moody’s in saying that a Swedish proposal to cap new interest-only loans at 50% of a property’s value, rather than the 75% maximum in force today, is credit positive. This is because it will lead to a lower mismatch between an issuer’s assets and liabilities, the main source of rating volatility for Swedish issuers.
On June 4, 2014, the Riksbank (Sweden's central bank) published its financial stability report stating that the lack of amortisation plans in the Swedish mortgage market was potentially destabilising.
The Swedish Bankers' Association responded by proposing that its members lower the recommended loan-to-value (LTV) ratios for borrowers with ...Already a subscriber? Login