Debt must be measured against repayment capacity The current loan-to-value cap on housing loans urgently needs to be accompanied by a new, more comprehensive cap on debt. This would take into account all a loan applicant’s debt relative to their income. Share Email Twitter Facebook Linkedin Google+
The highly indebted cut spending as the economy slows The more debt households take on during an economic upswing, the more likely they are to cut consumption when the economy begins to run out of steam. Share Email Twitter Facebook Linkedin Google+
Capping debt-to-income ratios complementary to housing loan cap The indebtedness of Finnish households relative to income has grown considerably since the turn of the millennium. A proportion of new residential mortgage holders have a heavy debt burden relative to their income. Share Email Twitter Facebook Linkedin Google+
New methods needed to rein in consumer credit Consumer credit can drive households into financial difficulties. New measures are needed to prevent increasing debt problems. Share Email Twitter Facebook Linkedin Google+
Corporate credit risk affected by business cycles and industry factors Finnish banks have granted relatively little credit to those industries most vulnerable to bankruptcies. This has helped minimise banks’ corporate credit risks. Share Email Twitter Facebook Linkedin Google+
Finnish commercial property market increasingly intertwined with foreign markets Foreign investment in the Finnish and other Nordic property markets has increased. As a consequence the Finnish market is more vulnerable to external risks. Share Email Twitter Facebook Linkedin Google+
The impact of digitalisation on bank profitability Investment in IT will improve banks’ long-term profitability, while weakening short-term profitability. Share Email Twitter Facebook Linkedin Google+
Household debt burden worryingly large – we must take a variety of measures to guard against the risks The accessible summary sums up the solutions presented in the Bank of Finland’s stability assessment that can get a grip on households’ excessive debt levels. Share Email Twitter Facebook Linkedin Google+
Rising household debt levels must be addressed in time Finnish households have a worrying level of debt. Advance measures should be taken to prevent the accumulation of excessive debt. Share Email Twitter Facebook Linkedin Google+