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Finland continues expanding household loans despite gloomy outlook

Friday, 23 September 2011
More Finns continue to take housing loans and the banks are also giving then as usual. It does not seen as if caution should be a key word anywhere there, as the micro and micro economic environment look uncertain.
The gloomy economic forecasts just do not affect Finnish banks and its borrowers. The major banks say that customers still seem to think over their loans more accurately than before. There are also signs that the loan amounts are smaller.

For banks, there is increasing pressure to raise lending margins, as it has become tougher also for banks to borrow money. Experience from the previous recession has also increased borrowers' tolerance.

The country’s unemployment situation also affects loans. According to statistics, the labour market situation is even better than it was a year ago. Neither banks nor consumers believe that house prices will fall, according to bank officials.
The General Manager of one of Finland’s leading banks,  Kenneth Kaarnimo of Sampo Bank points that inflationary pressures in the euro area is to assist in the increase borrowing.
Others such as Chief Analyst, Pasi Kuoppamäki, adds that the European Central Bank is not in a hurry or the intention to tighten monetary policy. Kuoppamäki believe that the ECB will maintain interest rates at 1.5 percent level. If the economic situation deteriorates, a reduction may be appropriate.
By Scancomark.se Team

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