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Bank of Finland Warns Against Escalating Household Debt

Friday, 13 May 2011
The Bank of Finland is concerned about the steady growth in the number of households taking on huge amounts of credit.

Households overburdened by credit are considered to be those in which their total credit is three times their annual income.

In its 2011 Financial and Stability Report issued Thursday, the Bank of Finland once more drew attention to the ongoing rise in the number of heavily indebted households.

In 2002, such households accounted for less than 10 percent of all households, compared to 17 percent in 2009. While the number of households struggling under heavy debts increased, the quantum of their credit also rose to account for nearly half of all household debt.


The Bank of Finland has issued many warnings to both householders and banks about the phenomenon, and its 2011 report calls for moderation in the growth of heavily indebted households.
“Households need to determine the size of their loans according to their ability to service these loans and prepare for the possibility of interest rates that are higher than the present rates. Banks must not grant loans that are excessive in terms of the collateral and debt-servicing capacity of the borrowing household,” said Pentti Hakkarainen, Deputy Governor of the Bank of Finland.
By Scancomark.se Team / YLE

Key Finnish Facts
Official Name Republic of Finland
President Tarja Halonen
Prime minister
Population 5.3 Million
Capital City Helsinki
Monetary Unit Euro (€)
  €1 = 100 cent
Domain Name .fi
Int. Dialling Code +358
Official Language Finish - 92%
Swedish - 6%
Religion Christianity
Main stock market Name NASDQ OMX Helsinki 25
Internet Speed 4.5 Mbps (2009)
Vital Links
Finnish Government
OECD data on Finland
Finland and UNICEF
Ministry of Economy  & Employment
Statistics Finland
Finland 's UNO Pages
Confederation of Finnish Industries


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