Heated housing market prevents new rate cuts – Aftenposten

– Low interest rate stimulates låneopptaket and house prices.

Governor Øystein Olsen knows well his responsibility for that heavier debt burdens and the forever rising house prices leads the Norwegian economy into ever more dangerous waters.

But he hastens to add:

There are also other matters that we must and should emphasize when we put the interest rate, he says.

Olsen should really reach many goals. But he has the key policy rate as its only policy instrument. Therefore, he must use discretion and weigh the many considerations against each other.

Unchanged interest rate from Norges Bank today and “the next few years,”

Tightens to and gearing up

in any case it shows the events in the last few days that the instruments of the economic policy is increasingly being directed against the heated housing market:

• Thursday decided the executive board of Norges Bank to keep the key rate unchanged at 0.5 per cent. the Had not been for the dangers of rising house prices and debt had it been set down.
• at the same time particular the Ministry of finance that the banks through 2017 must build up more money in the cashier for given lending. They will be upgraded better for the potential losses.
• Wednesday appointed the Ministry of finance new regulations for the mortgage. the the Goal is to tighten the banks ‘ utlånspraksis. Financially vulnerable customers should not get loans and the loans being for some less than they otherwise would have been.

Olsen was director Torbjørn Hægeland at the press conference on Thursday.

the Color of the ties their symbolized in a way the compound the message from Norges Bank: One tie was black and one was julerødt.

Director of black tie

Hægeland tells with many figures on house prices and debt growth, which almost takes the breath from them that fits on the Norwegian economy.

Hægeland had taken on a black tie. He told that banks from the end of next year have to have more money in the cashier to be in a better position to take the losses that can come. Solicitation is that “financial imbalances are building up further up.”

the Ministry of finance arm banks in the case of people’s sky-high debt causes the economy into a dark spiral.

Hægeland describes the spiral as follows:

• Many households get higher interest rates and some get reduced income, for example, by the fact that they lose their jobs.
• When such things happen, they will continue to service their debt to the bank. But they will tighten on its consumption. It is not a new washing machine or renovation of the house. Frossenpizza replaces the restaurant.
• This will affect the business community. Shops, restaurants and artisans are getting less to do.
• Problems in the business sector can, in turn, make the banks lose more of their lending to the corporate sector.

Experience from previous crises shows that the bank’s loss was not first and foremost came on the mortgage. But it came on the lending to the corporate sector, as a result of that the household restricted to service their loans, says Hægeland.

Boss with julerødt tie

the Governor Olsen had taken on the slips in a deep red colour which stands for the upcoming christmas holidays.

He made himself enough behind it a little dark message from the director with the black tie. But he had in addition a brighter message in the winter.

– In our estimates for now, as it appears so that the bottom will be when reached in 2016 when it comes to overall activity. So the growth takes up somewhat next year and in the future, ” he says.

The worst is over in the oljeplagede Norwegian economy.

• Norges Bank’s forecasts for the economy to 2019 you can read here.

Olsen does not manage everything alone

Olsen answers “yes” on the question of whether Norges Bank will need help from others to get closer to the objectives of the economic policy.

He rejects “to take responsibility” for the housing market.

– the Monetary policy can not solve all the challenges. Pengepolitikkens main goal over time must be bounded, and is bounded, to keep inflation low and stable, ” he says.

Measured against the prospect for price growth to 2019 in the first place look like Olsen is heading in completely the wrong direction. In the years predicting that inflation is far above target. The three subsequent years to 2019 cutting inflation below the target of 2.5 per cent with increasing distance.

But Olsen looks beyond the numbers. When inflation is near goal and all who participate in the economy expect that he meets the goal, over time, can She help stimulate production and employment. The cost for Olsen is that inflation in some years will deviate from the target.

Additional common sense

It ask the boss with the julerøde tie about people should use more or less this christmas, compared to last year. He turns out to be a bit løssluppen.

– People should enjoy themselves at christmas. They should spend a little extra money, but with reason.

– we Can say that there are good new year?

Absolutely!

the United states ‘ central bank set up the interest rate Let the students try their hand at the full of crisis, in Norges Bank New lånegrense to slow down the housing market: – Good for to curb inflationary pressures for førstegangskjøpere