The Riksbank could take a hint from the BoE

In the UK:

The governor expressed a reluctance to use interest rates as a way of cooling down the housing market because it would affect all parts of an economy only just recovering from recession.

“You could use [interest rates] to address financial stability but it is a very blunt tool. It hits all aspects of the economy from the south to the north from across manufacturing. It affects exporters. It has a range of impacts – SMEs [small and medium-sized firms] as much as people borrowing for detached homes in Knightsbridge.”

Meanwhile in Sweden:

“Today I intend to talk about monetary policy and the new policy area, macroprudential policy, and how these two areas are interlinked. My message today can be summed up in a few points. First: in the absence of a clear framework for macroprudential policy, we have taken into account in our monetary policy the risks linked to the high level of household debt in Sweden. This is because we have wanted to avoid the consequences that many other countries have experienced as a result of high indebtedness and falls in house prices.” 

HT Antonia Oprita

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