OSLO, June 6 (Xinhua) -- The Financial Supervisory Authority of Norway (Finanstilsynet) is worried about Norwegians' high debt and the negative impact of an increased interest rate on the economy, online newspaper E24 reported Wednesday.
"A sharp rise in interest rates can trigger a significant and rapid decline in household purchases of goods and services, which will affect the Norwegian economy broadly and lead to a fall in earnings and equity ratio in Norwegian companies and financial institutions," Finanstilsynet director general Morten Baltzersen was quoted as saying.
In a fresh report, Finanstilsynet showed that household debt growth had remained high, and housing prices had increased, which means households will continue to take out high loans.
The Norwegian Association of Real Estate Agents (NEF) shared this concern about the correlation between increase of housing prices and debt.
"We believe it is necessary to continue tight lending practices in the coming years in order to reduce the vulnerability of households to a future fall in housing values and increased loan costs," said Carl O. Geving, chief executive of NEF.
"At the same time, action must be taken to ensure that young people in the establishment phase with good ability to provide services, but who lack financial support from family, have the opportunity to buy apartments at healthy loan terms," he said.