Flodén: Stora löptidsobalanser på svenska bolånemarknaden – hur vill vi att marknaden ska se ut?
“Swedish banks fund mortgage lending by issuing bonds with significantly shorter maturities than the repayment periods for the loans. This maturity mismatch has grown stronger in recent decades and is larger in Sweden than in most other countries. I consider it important that we discuss the risks this development brings with it and whether we are satisfied with the way that the mortgage market is functioning,” says Deputy Governor Martin Flodén.
Date: 04/04/2017 07:30
Speaker: Deputy Governor Martin Flodén
Place: Swedish House of Finance, Stockholm
The major Swedish banks fund mortgage loans by issuing covered bonds. The average maturity for these bonds is about three years. This means that the major Swedish banks have a smaller proportion of funding at longer maturities than many of their European equivalents. At the same time, the average repayment time for a mortgage in Sweden today is almost 80 years. This is creating large maturity mismatches on the Swedish mortgage market.
In the Riksbank study "The major Swedish banks' structural liquidity risks", the Riksbank and the authors of the report have presented proposals for various measures that could reduce the liquidity risks. The study can be used as a starting point for continued discussions of the maturity mismatches on the Swedish mortgage market.