The financial sector knocks out the Bank of Finland’s debt ceiling proposal

In the opinion of the association, the acquisition of housing should not be hampered by the profit-related debt ceiling proposed by the Bank of Finland earlier on Wednesday.

Finanssiala ry opposes the use of a debt ceiling to prevent Finns from becoming over-indebted, the organization says in a statement.

Chief Economist of the Association Veli-Matti Mattila says in a statement that the authorities already have the means to curb over – indebtedness and that more is needed on top of them and the new ones currently being prepared.

“Households’ housing should not be hampered, for example, by the performance-based debt ceiling proposed by the Bank of Finland,” says Mattila.

Bank of Finland proposed a debt ceiling in its report released on Wednesday. According to it, high household indebtedness is a risk to the stability of the financial system. Debt ceiling refers to the maximum amount of debt or debt service expenditure in relation to the income of the borrower.

New instruments are being planned for Finland to curb indebtedness. The Board’s draft proposal proposes a limit on the length of housing and housing company loans, as well as the repayment obligation and loan ceiling for housing company loans.

According to the Bank of Finland, the reforms are necessary and worthwhile, but they are not enough to curb the growth of household indebtedness.

Read more: Bank of Finland: Accelerated household indebtedness must be curbed by more drastic means

Financial sector According to him, the acceleration of inflation and the global political situation have increased Finns’ caution in acquiring their own homes, among other things.

According to the association, measures to combat over-indebtedness must be effective in preventing over-indebtedness, but they must not hamper the housing market or economic recovery.

The financial industry is proposing solutions such as tackling quick tips and a housing loan ceiling.

By Editor

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