Riksbank's Deputy Governor Lars Svensson said monetary policy cannot tangibly reduce the potential risks in household debt without clear prejudice to the central bank's mandate to maintain price stability and attain the lowest sustainable rate of unemployment.
The policy rate and monetary policy have a relatively large effect on inflation and unemployment, he said in a speech at SNS on Wednesday.
So, if the risks with household debt are considered too high, one should instead use other available measures, such as the loan-to-value cap and risk weights for mortgages.
In addition, measures such as reduced tax deductions for interest payments and higher risk weights on the banks' mortgages, are also available, he says.
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