“Swedish households today are among the most indebted in Europe and we cannot have household lending that spirals out of control,” Martin Andersson, the director general of the Financial Supervisory Authority, said in an interview in Stockholm.
The FSA is ready to enforce a cap limiting home loans relative to property values to less than the 85 percent allowed today, Andersson said
“What we saw in the 1990s crisis was that if you bought a home with a 90 percent debt ratio in 1991, it took about six or seven yearsuntil you were back at a level where you had a property that was worth more than your mortgage,” Andersson said in the Feb. 13 interview. “That is a very long time.”
“One should be prepared for a downturn,” Andersson at the FSA said. “House prices cannot just continue upwards in eternity.” sourceSome charts ...