Norway Cracks Down on Mortgage Risk to Fight Housing Bubble
This article is for subscribers only.
Norway’s financial regulator is throwing its weight behind a government proposal to force banks to assign higher loss probabilities to mortgage assets as the nation looks for ways to cool its overheated property market.
The Financial Supervisory Authority in Oslo will add stricter risk-weight recommendations to a raft of measures, including curbs on covered bond issuance, all designed to prevent a repeat of the 1990s crisis that sent Norway’s real estate prices plunging 40 percent and left households with unsustainable debt loads.