Nordic countries to tighten regulation on housing loans

Abstract

The Nordic countries are about to introduce stronger measures to reduce the risks related to housing lending and fluctuations in house prices. Sweden and Norway intend to increase the risk weights applied to housing loans in the calculation of capital adequacy requirements for banks. In Denmark, the rules on booking banks' provisions for credit losses were tightened. In Finland, the government is expected to issue a proposal for a law amendment which would enable a binding cap on the loan-to-value ratio for housing loans.