Norway FSA sees stronger case for extending mortgage restrictions

Morrow Bank ASA

06/06/2018 09:26

OSLO, June 6 (Reuters) - A recent upturn in Norwegian
housing prices has further boosted the case for extending the
country's restrictions on mortgage lending, the country's
Financial Supervisory Authority (FSA) said in a semi-annual
report on Wednesday.
    The regulator has for years warned against the effects of
higher housing prices, which have been accompanied by a surge in
household debt, making the economy vulnerable in case of a
sustained downturn.  urn:newsml:reuters.com:*:nL8N1NZ2AI
    "In the period since (the FSA) submitted its recommendation
to the Ministry of Finance, house price growth has picked up,
contributing to continued high borrowing by the household
sector," it said.
    "This strengthens the rationale for continuing the
regulation of residential mortgage lending as proposed," the FSA
added.
    The regulations are due to expire by the end of June, but
the finance ministry is expected to announce a decision before
that time on any potential revisions to the rules.
    At the end of 2017, household debt stood at 225 percent of
disposable income, the FSA said.

 (Reporting by Camilla Knudsen, writing by Terje Solsvik,
editing by Gwladys Fouche)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70; Reuters
Messaging: terje.solsvik.thomsonreuters.com@reuters.net))