– We would like to stress that tapspotensial on these loans can be easily underestimated if one only looks at historical losses. This is a market in strong growth, there are many that increases its debt, for example, by pulling on the kredittrammer, and the losses can easily come to appear as larger than they believe if one looks at historical numbers, ” said director Morten Baltzersen in the financial supervisory authority of norway during a press conference Wednesday.
Economic mess
financial supervisory authority of norway presented the report “Financial trends”, and the explosive growth in the consumer loans are among the part of the authority concerns about household finances.
“Even if consumer loans constitute a small proportion of household loans, recording of the personal loans apply individuals large loads. It is important that the lenders do not underestimate the risk of loss”, said the report.
The last few years has the overall forbrukslånet in the Uk increased sharply, and were at the end of the third quarter of 2016 around 86 billion.
This product can easily lead many people out of the economic mess. It is a regard to consumer protection in itself that is important here – although it has only limited importance for financial stability, says Baltzersen.
– Several may get problems
financial supervisory authority of norway also lays emphasis on the fact that the banks must take into account the customers ‘ long-term interest when they lend out money without security with high interest rates.
– Would want to experience financially worse times in Norway, with increased unemployment, more problems to service the loans, said Baltzersen.
In a stress test financial supervisory authority of norway has conducted for banks in Norway, was the breach of contract the greatest personal loan.
There is much that suggests that it is the first thing one will fail. You will attempt to as far as possible to operate boliglånet, said Emil Steffensen, director of the bank and forsikringstilsyn in the financial supervisory authority of norway.
– Ongoing marketing
the Profitability has been very good in forbruksbankene the last few years, which has meant that many new entrants have come and pointed out Baltzersen.
He believes the growth is strong and supports the proposal of the consumer ombudsman to tighten the rules for marketing.
– We believe it is an important proposal for better consumer protection and mitigate the growth in this market, ” said Baltzersen, who described the marketing as “ongoing” and “quite aggressive”.
Several companies have marketed personal loans as equity, which can be prohibited.
During the press conference was Baltzersen’s questions On whether the authority has been cracking down on such marketing, but he did not respond directly on this.
” We are concerned for the growth in consumer loans, and there is a danger that the personal loans is not provided by the mortgage. A gjeldsregister will help to reduce this risk, ” said Baltzersen.
reputational risk
financial supervisory authority of norway also points out that the strong growth in consumer loans constitute a reputational risk both for the banking sector in general and forbruksbankene in particular.
“By an increase in unemployment and necessary consolidation in the household sector, it would be expected an increase in defaults and losses on consumer loans. For banks and enterprises, it will also involve a reputational risk to be heavily involved in the consumer loans”, called it in the accept finanstilsynet’s report.
Baltzersen called the risk of “significant” during the press conference
– Omdømmerisikoen is related to what they can inflict on vulnerable individuals, he said.
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