The limping Stockholm stock market bite a big chuck out of Swedish household wealth


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Monday, 13 June 2011
The persistent poor performance of the Stockholm stock market this year has constricted Swedish household wealth as the Swedish household net worth fell by Skr60 billion to Skr7 420 billion during the first quarter.

According to the Swedish banking giant SEB which made the study in its savings survey presented on Monday, the reason for the fall has all the trade marks of the falling Stockholm Stock Exchange

The debt ratio, that is, household debt relative to assets, remained unchanged 27 percent. Households continue to borrow more, but its growth has slowed.


Net savings were very low during the first quarter and the new savings that were, were mainly deposited to collectively agreed occupational pensions.

“If you remove it, which actually is not something that households are taking out of their wallets, it has been strongly negative, and households have taken more out of their savings. I think it reflects the higher interest rates and very high electricity bills during the winter months, "said Gunilla Nystr�m, private economist at SEB, who presented the study.

She also notes a clear deceleration in lending, which is linked to interest rates.
The Swedish central Bank in its rate-hiking cycle, saying that interest rates will be back to more normal levels, perhaps just under 4 percent in the next few years. During the past year, three-month rate in principle has been more than doubled and the Swedish households have very short mortgage rate. Mortgage lending ceiling also allow households to pull stay couscous.

For the quarter, there was 1.1 percent increase in loans. To get down to when such a rate was observed in Sweden, SEB looked back the first quarter of 1998.

“There was a lot less money then, but its growth rate (lending ) was 1 percent, "said Gunilla Nystr�m.
By Team

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