"Minister of Finance Jyrki Katainen is calling on banks to alleviate fears that private individuals could be hit with higher interest rates on housing loans.
At a press conference on Thursday, Katainen criticised banking institutions and the Finnish Financial Supervision Authority for not calming fears about banks increasing interest on home loans."
"The uproar began after the newspaper Turun Sanomat revealed banks negotiated a deal with quasi-governmental agencies to allow greater flexibility in loan arrangements for private individuals."
"The procedure was drawn up by the Federation of Finnish Financial Services. It was approved by the Finnish Financial Supervision Authority and the Consumer Agency. These agencies are affiliated with the Bank of Finland and the Ministry of Employment and the Economy respectively."
"So far Nordea, the nation's biggest lender, is the only Finnish bank to include the clause in housing loan contracts. It has been doing so since the beginning of July. However the bank is not allowed to crank up interest rates for at least three years after a loan agreement is signed -- and then only in case of a crisis that threatens the lender's very existence."