Norway government rejects bank regulator's proposed lending curb (updated)

Sparebank 1 Nord-Norge

09/12/2020 10:15

(Adds quote, detail)
    OSLO, Dec 9 (Reuters) - The Norwegian government has
rejected a proposal from the country's bank regulator to cap
lending to private individuals at a lower level than today, the
finance ministry said on Wednesday.
    Norway's Financial Supervisory Authority (FSA) had proposed
reducing the maximum limit for borrowers' debt to 4.5 times
their gross annual income, but the regulation will instead
remain unchanged at 5 times income, the ministry said.
    "The current regulation works well," Finance Minister Jan
Tore Sanner said in a statement.
    "I see no reason for a tightening, particularly now that
many are experiencing greater uncertainty around their economic
future and in light of a more subdued growth in debt in the last
year," Sanner said.
    The FSA is concerned that mortgages and other loans
increasingly go to borrowers who have few financial buffers and
has argued that individuals as well as banks could eventually
suffer.  urn:newsml:reuters.com:*:nO9N28E015 urn:newsml:reuters.com:*:nFWN2GN06Q
    Other institutions, including the central bank, had
recommended, however, that the maximum borrowing limit should
remain unchanged.
    The ability of banks to deviate from the regulation for
mortgages will meanwhile remain at 10% of all cases nationally
and 8% in the capital, while the FSA had proposed a cut to 5% of
all cases nationwide.

 (Reporting by Terje Solsvik, editing by Gwladys Fouche)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70))