May 26, 2016 / 6:11 AM / a year ago

Swedish FSA says household debt not threat now, but economy vulnerable

STOCKHOLM, May 26 (Reuters) - Household debt levels in Sweden are not an immediate threat to the financial system but make the economy vulnerable to shocks, the market watchdog said in its twice-yearly stability report on Thursday.

The chief of the Financial Supervisory Authority (FI), Erik Thedeen, said he would call in the heads of the country's major banks to discuss rising household indebtedness.

"Now is the time to increase resilience and I am working from the assumption that the banks share our view that we need to slow the rate at which household debt is increasing," Thedeen said.

House prices have tripled in the last 10 years leading to growing worries among policy makers that surging levels of mortgage debt could trip up the economy.

Reporting by Simon Johnson

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