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Swedish households continue to be cautious – fall in borrowing and increased savings

Thursday, 22 March 2012
Swedish households continue to be prudent in their choices of financial savings. During the fourth quarter last year households chose safer savings in the form of bank deposits and investments in bond and money market funds. Despite the positive stock market trend, savings in shares and equity funds decreased.
According to statistic Sweden, the financial wealth of households, i.e. financial assets minus liabilities, amounted to Skr 3 536 billion at the end of the year. This is an increase of Skr 133 billion during the fourth quarter of 2011.

The Stockholm Stock Exchange rose 8.4 percent during the fourth quarter according to Affärsvärlden's general index. The positive stock market development strongly contributed to a partial recovery in wealth, of which parts were lost earlier in the year.
Despite the positive stock market development, households continued to be cautious. Possible reasons for this behaviour could have been the negative news about the European debt crisis, an uncertain housing market and the risk of a worsening labour market.

Households continued to make net sales, purchases minus sales, of Swedish shares and equity funds for Skr 3 billion in the fourth quarter. Net sales amounted to a total of Skr 28 billion in 2011.

Instead of shares, households chose safer savings forms such as bank deposits and short-term interest funds. Households' net purchases of short-term interest funds amounted to Skr 0.7 billion. This is the largest single most quarterly information noted since the fourth quarter of 2008.

Households' deposits in banks and financial institutions continued to be extensive. During the fourth quarter households' deposits increased by Skr 33 billion, this is at the level of the two most recent quarters.

Non-financial corporations increased their borrowing in monetary financial institutions by Skr 10 billion during the fourth quarter. The total loan stock of corporations amounted to a total of Skr 1 792 billion at the end of the year. Loan stocks has increased by 7 percent in 2011 and have in terms of size passed the previous top level that was reached before the financial crisis.
News source: Statistic Sweden

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