Swedish policy impasse raises fears of runaway housing market

Stockholm

WITH the latest effort by Sweden to cool its housing market postponed by a court, concerns are escalating that political stagnation, a faulty institutional set-up and high household debt risks sending the triple A economy into a tailspin.

A move to force homeowners to pay down the principal of their mortgages - what many economists say is the very least needed to avoid a housing bubble - was postponed after a court in April said that the Swedish Financial Supervisory Authority (FSA) lacked a legal mandate.