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Swedish FSA to propose measures to reduce growth in mortgage debt

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Swedish FSA to propose measures to reduce growth in mortgage debt

Sweden's Financial Supervisory Authority will propose new measures for a so-called debt brake in a bid to reduce the stockpile of household debt in the country, Reuters reported, citing a speech by Director General Erik Thedéen.

Under the proposal, which Thedéen said will be presented to the government in autumn, mortgage borrowers would be required to make higher payments if they had borrowed more than 450% of their gross income, or about 6x disposable income, according to the Oct. 3 report.

The Swedish government plans to hand the regulator broader regulatory powers in 2018, the newswire noted. Should the plan be brought to fruition, Thedéen said the FSA would assess whether more needs to be done to slow mortgage debt growth, which could include the introduction of a cap on borrowing with regard to household income in the future.