Finland alerted to household debt

Abstract

The European Systemic Risk Board (ESRB), which is responsible for macroprudential oversight of the EU’s financial system, has issued a warning to Finland concerning the medium-term vulnerabilities related to household indebtedness and lending for house purchase. For purposes of risk mitigation, more efficient instruments should be made available to the Finnish authorities to limit the maximum size of new housing loans relative to the loan applicant’s debt-servicing capacity. There are, however, no threats to the stability of the Finnish financial system in the short term.