Sweden’s house prices and private indebtedness: which new policy measures are needed – and when?
Sweden has experienced swift and persistent house price increases, driven by favourable credit conditions, tax incentives that favour (debt-financed) investment in owner-occupied housing and supply constraints that limit new housing construction.
Household indebtedness and mortgage exposure of the financial sector have also seen rapid growth, creating large potential deleveraging needs that make Sweden vulnerable to macroeconomic and financial shocks. This triangle of house prices, indebtedness and banking sector exposure has been identified as a key macroeconomic imbalance, requiring decisive policy action.
Following the adoption of the EU’s Country-specific recommendations (in July) and the return of policymakers from the summer break, the aim of the event is to re-focus the attention on the identified imbalance as well as the policy recommendations providing additional momentum in the policy debate.
The European Commission introduces the context before policy makers and academics put forward their views. The panels will then discuss (i) the economic case before (ii) entering into potential policy measures, followed by a general discussion.
9.00-9.30 Registration and Coffee
9.30-9.45 Welcome and introduction: Istvan Szekely, European Commission, DG ECFIN
9.45-11.00 Session 1: Swedish house prices and private indebtedness – a bubble to burst?
Panel:
Peter Englund, Department of Finance, Stockholm School of Economics
Kent Janér, Fund Manager, Nectar
Moderator: Pehr Wissén, Stockholm School of Economics
More panelists will be added.
11.00-11.15 Coffee break
11.15-12.30: Session 2: How can policy best contribute to a soft landing?
Panel:
Karolina Ekholm, Ministry of Finance
Martin Flodén, Sveriges Riksbank
Erik Thedéen, Finansinspektionen (FSA)
John Hassler, Institute for International Economic Studies, Stockholm University
Moderator: Istvan Szekely, European Commission, DG ECFIN