housing

Sweden’s financial regulator needs a bigger budget to cope with its expanding role. The Financial Supervisory Authority is seeking a 10 per cent budget increase per year for three years, on top of its 300m krona ($41m) budget, director-general Martin Andersson told Bloomberg.

Sweden’s banks, which are expected to lose $3.7bn this year from operations in the Baltic countries, might also be facing a housing bubble at home. Record low interest rates have increased mortgage arrangements in spite of rising unemployment. House prices rose 5 per cent in the last quarter, having already passed pre-crisis peaks. 

Surprise data from the Bank of England shows mortgage approvals fell in December – the first drop in more than a year. Analysts had expected the number of loans to rise.

So, while expecting an increase of 3.1 per cent, the number of mortgage approvals actually fell by 1.7 per cent, the Bank of England said today. 

Krishna Guha

Boston Fed chief Eric Rosengren thinks mortgage rates will rise by 50 to 75 basis points in the spring as the Fed stops buying MBS.

That puts him on the high side of the internal Fed debate – various committee members see the likely impact in the 25 to 75 basis point range.