IMF Says Iceland’s Debt Relief Risks Housing Fund: Nordic Credit
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Iceland’s plan to help households buckling under inflation-linked mortgages is bad news for the state’s Housing Financing Fund, according to the International Monetary Fund.
The government unveiled plans last month to reduce household debt by 150 billion kronur ($1.28 billion), in part by raising taxes on banks and offering tax breaks for homeowners. The move, which was a pre-election promise, risks backfiring because of the burden it will place on HFF’s balance sheet, according to the IMF.