Wednesday, July 9, 2014

IMF warns Nordic countries of surging house prices

September 05. 2013 10:36AM
Associated Press

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(AP) The International Monetary Fund is warning that the Nordic countries' large, shared banking sector, high household debt and property prices pose a financial risk for the region.

The IMF on Thursday said Nordic countries' "robust social institutions" and sound macroeconomic policies helped them outperform others during the recovery from the global financial crisis, but warned the region's large banking sector is heavily reliant on wholesale funding.

It said household debt in parts of the area is among the highest within the Organization for Economic Cooperation and Development and urged authorities to restrict the availability of interest-only mortgages. It also said it was important to maintain strong fiscal buffers and phase out preferential tax treatment of housing assets.

It welcomed measures to set up mechanisms to deal with distressed banks.

Associated Press

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