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UPDATE 1-Norway's central bank opposes tightening of mortgage lending rules

Mon 14th October, 2019 3:56pm
(Adds background, details)
    OSLO, Oct 14 (Reuters) - Norway's central bank said on
Monday that it opposes tightening rules for mortgage lending to
households, as proposed by the Financial Supervisory Authority.
    The regulator, aiming to bring down high household debt,
proposed in September that bank customers should be allowed to
borrow only up to 4.5 times a household's gross annual income,
instead of five times previously, and that banks should only
deviate from rules in 5% of cases.  urn:newsml:reuters.com:*:nO9N23701T 
    The central bank, Norges Bank, said there was no need to
tighten regulations because growth in household debt was easing
and house price growth was also moderating.
    "Norges Bank believes that the austerity measures proposed
by the Financial Supervisory Authority in the requirement for
maximum debt ratio and in the flexibility ratio as a whole will
constitute a significant tightening in the requirements of the
regulations," the central bank said in a letter to the ministry.
    "Norges Bank believes that the requirement for maximum debt
ratio should not be changed," it added.
    Norway has one of the highest rates of household debt among
developed countries, according to the Organisation for Economic
Cooperation and Development.
    Over the past couple of years, however, debt has risen at a
slower pace as household income has increased, the central bank
    "In the future, we expect that increased interest rates and
continued moderate house price growth will help dampen debt
growth further," it said.

 (Reporting by Nerijus Adomaitis; Editing by Kevin Liffey and
Susan Fenton)
 ((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters
Messaging: nerijus.adomaitis.thomsonreuters@reuters.net))
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