Financial stability and financial market issues
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M supports the government's communication and considers financial stability to be necessary for lending, investments, and innovations 1. M wants to counter unsustainable lending by removing interest deductions for unsecured loans and making amortization requirements more purposeful 1. S argues that the government stands on the side of the wealthy and advocates for a bank tax and state service centers 2. KD considers the current amortization requirements to be too strict and wants to ease the reinforced requirement 3. KD views proposals for caps on credit costs, tightened credit assessments, and regulation of gambling on credit positively 3. KD considers that the banks need to take greater responsibility to prevent crime 3.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Ida Drougge (M)
Mr. Speaker! I would like to begin by moving for approval of the committee's proposal for a decision, that the government's communication regarding the work in the International Monetary Fund shall be added to the records, and for the rejection of the motions.
After eight years of Social Democratic rule, where Sweden's development has gone completely in the wrong direction point by point, where things that previously have functioned well, such as nuclear power, have been dismantled and where things that have not functioned for a long time, such as crime fighting, have escalated to today's system-threatening level, we now have a government that is making major course corrections in area after area.
We are doing this in a difficult time with an uneasy world, an increased security situation with low growth, high inflation and global unrest. It is not an easy task or any fun commitments, neither for the government nor for Sweden, but it is a necessary task.
The core of managing these challenges is to increase employment and growth. There, we must always safeguard financial stability. Financial stability may sound boring but is completely necessary and needed for lending to function. Loans for housing and companies must function so that investments can be made and so that innovations can reach the market and become available to more people, but also so that our financial services, which we use every day, shall function, so that we can pay for food and bills and save for housing, pension, and a buffer.
Safeguarding financial stability is a cornerstone of our economic policy that we perhaps do not always talk about so much. If stability is lost, hundreds of thousands of jobs and years of economic development are at risk. The basis for stability is sustainable public finances with sufficient buffers. In addition, measures are needed that are based on the current risk profile that we have right now in Sweden.
We find ourselves in a serious security policy situation. Price increases and unemployment risk pressing our households and companies. Climate change affects the risk profile for investments and loans. New technology changes our consumption patterns and how we use our financial services. At the same time, our country is hit by system-threatening crime that strikes against trust and against security.
Policy needs, among other things, to counter unsustainable lending. Fast credits, ranging from SMS loans to credit purchases, have grown significantly in recent years. Interest expenses for unsecured loans today account for approximately one-fifth of households' interest expenses. If that increase continues, it risks becoming a problem for stability. It is also not reasonable that taxpayers are involved in subsidizing that development. Therefore, the government is working on a proposal that entails that the interest deduction for unsecured loans is removed.
On the government's mandate, the amortization requirements are also being reviewed, with the aim that they should become more purposeful. One starting point is to be able to manage households' risks in cases of high indebtedness in a more purposeful way.
In the morning, I met entrepreneurs who spoke despairingly about a growing problem with extortion directed at them and their employees who live in areas of exclusion near gangs. They are threatened with violence against them and their families if they do not let the gangs steal in the stores. The criminals' rampage ruins things for everyone who wants to do right, who wants to work and contribute.
I listened to another entrepreneur who told that she, over seven years, made an average of five to ten police reports per week. Only a single one has led to a prosecution. The criminals' rampage also destroys the trust in our society and the growth. That time she could have spent on other things.
This places demands on political measures. The government is taking those now. Our measures need to be more organized, more strategic and more powerful. Our authorities and our economic policy need to work together with the crime policy to choke off the gangs' sources of income. The criminal economy alone turns over around 150 billion kronor per year. Fraud today yields a larger crime profit for the criminal gangs than the entire drug trade.
To push back these problems, the measures must increase and the work must be intensified. The government is doing this now with new effective rules that enable cooperation to a greater extent. We have also raised the requirements for currency exchange offices, in order to counter money laundering. And we are working on further measures to counter fraud.
The work of the Swedish Tax Agency, the Swedish Customs Service, and the Swedish Enforcement Authority has been strengthened and received more resources and expanded powers. The authorities are directed to focus on this type of crime and activity. The Swedish Financial Supervisory Authority and the Swedish Gambling Authority have been tasked to cooperate to block payment mediation to and from illegal gambling activities, counter-match fixing, and prevent money laundering.
It is not an easy task that the government has undertaken, but it is a necessary task.
Björn Wiechel (S)
Mr. Speaker! Financial stability and the situation in the financial markets fundamentally depend on how things are going in the real economy. In recent years, Swedish households have lived through a deep cost crisis. The cost increases have eaten up ten years of real wage increases. At the same time, it is precisely the wage earners who have taken the great responsibility of pushing back inflation through restrained wage demands. It is an impressive effort for Sweden.
People have not only seen their savings. They are also forced to cut back on the everyday. One third of all adults in Sweden have difficulty paying the rent and other running expenses. People must borrow money for food.
One could have expected the government to take corresponding responsibility. But the support for those who have it toughest is minimal. When we Social Democrats propose an extra child allowance and increased maintenance support for single parents to reduce vulnerability, the government votes it down.
The government has instead chosen to lower the tax for those with the highest incomes, while the sick or unemployed, who also have families to support, do not receive any tax cut. Instead, the unemployed and those who are now being laid off within healthcare and the construction sector are met with the fact that Åkesson and Kristersson are also cutting their unemployment insurance (a-kassa).
Mr. Speaker! How the cost crisis hits is obviously different, as is how a government chooses to act. The SD government does as right-wing governments do and stands on the side of the wealthy.
At the same time as the queues to the soup kitchens are growing longer, there are those who are making gold with a carving knife, not least the banks. They have taken the opportunity to enrich themselves through differences in deposit interest and lending interest. They make profits of 500 million kronor a day. Nevertheless, they are withdrawing from the local communities around the country, to the great detriment of local businesses and with worsened investment conditions as a result.
Here we have the Social Democrats' proposals that the state service centers shall be that which enables a functioning financial system throughout the country. We also have proposals that SBAB can be used to increase competition in the mortgage market and achieve a price pressure to the benefit of the customers.
We have, among other things, proposed a bank tax to remedy the banks' unjust profits. The tax is designed so that the bank that considers itself too good to take these unreasonable profits is not covered by it, while the bank that does not refrain is forced to return a portion to households through the tax. But this is what the SD-government votes no to.
We know that Ulf Kristersson receives thank-you texts from the private school lobby when he ensures that their profits are protected. It would therefore not be surprising if Jimmie Åkesson and Ulf Kristersson are now also receiving happy cheers from the country's bank directors.
Mr. Speaker! That some are on their knees while others grab for themselves and that the government contributes to reinforcing that division in our country affects financial stability. When we in the Riksdag are to make fiscal policy decisions, as well as for the Riksbank when it is to make monetary policy decisions, in order to establish stability, it is important to know what the economic situation actually is and what impact the decisions will have.
Today, important knowledge regarding households' assets and debts is lacking. Obtaining statistics on this is about getting the necessary facts and basis to weigh the policy. Just like other statistics, it would be anonymous. But this statistics, for which the Riksdag in broad agreement appointed an investigation to obtain and which the Riksbank, the Fiscal Policy Council, the Financial Supervisory Authority and even the IMF all request, is being opposed by the SD-government. It is astonishing and irresponsible.
The opposition seems to be rooted in the fact that business leaders and large shareholders are afraid that such knowledge would expose how extensive the economic gaps are between them and ordinary wage earners. They do not want the reality to come to light, and for the SD government, this seems to weigh more heavily than the country's ability to maintain financial stability. Perhaps Åkesson will receive even more thank-you texts?
Mr. Speaker! Unlike the SD government, we Social Democrats prioritize supporting vulnerable households in the cost crisis, and unlike the SD government, we do not side with the bank directors but instead present proposals that increase competition, target the banks' unjust profits, and return resources to the households. Unlike the SD government, we also put the stability and the well-being of the majority of the people before the financial elite's self-interests.
We stand by our reservations and choose to move for approval of reservation 8.
Yusuf Aydin (KD)
Mr. Speaker! Before 2022, for many years, we have had a very expansive monetary policy with low interest rates which has led to very high levels of debt in households and companies. When inflation and interest rates have risen rapidly and strongly over the last two years, it has, in our interest-sensitive country, exposed many households and companies to severe economic pressures and the financial market to increased risks. We can, however, state that since the financial crisis of 2008 and 2009, the financial system's resilience to disruptions has been strengthened and the crisis preparedness has improved. The Financial Supervisory Authority has received more resources to manage its supervisory work. The Swedish banks are resilient with good capital levels and liquidity buffers.
Mr. Speaker! Many households have been hit hard by the high interest rates in combination with the amortization requirements. The Government therefore tasked the Financial Supervisory Authority with mapping out how the exemptions from the amortization requirements have functioned. These exemptions are important safety valves for the mortgage customers who are hit the hardest. The evaluation showed that the banks have primarily handled the exemptions in a good way. In the same way that we Christian Democrats have been proactive in pushing to extend and strengthen the temporary housing allowance for the economically most vulnerable families with children, this safety valve is important in this economic situation. We Christian Democrats think it is good that the exemptions have functioned well but believe that the current amortization requirements are too strict and make the threshold to owned housing too high for many households.
We want to ease the increased amortization requirement that was introduced in 2018 but are at the same time keen to find a balance between people's need for housing and financial stability. We therefore welcome the review being conducted to analyze and evaluate how the amortization requirement and the other borrower-based macroprudential measures have functioned so far and how they can be designed moving forward.
Mr. Speaker! The low interest rates have also driven an increased lending, which has led to many people today being affected by over-indebtedness, which creates problems for both the individual and society. For the Christian Democrats, the individual is important. Therefore, we believe that measures at the macro level must be combined with measures at the individual and micro level.
The biggest problems with over-indebtedness are not on the mortgage side, but rather these are found among the unsecured loans, which have seen an explosive increase in recent years. The risk that a new credit is sent to collection within five months is 50 times greater for a consumer credit compared to the major banks' traditional mortgages. Therefore, the Kristdemokraterna view several of the proposals submitted in the investigation *Ett förstärkt konsumentskydd mot riskfylld kreditgivning och överskuldsättning* positively.
The investigators propose, among other things, a cap on credit costs and an interest rate cap, as well as a stricter credit assessment. Furthermore, it is proposed that businesses shall always be required to perform a credit assessment. They also propose stricter regulation of gambling on credit, which the Kristdemokraterna view very positively.
The Government has referred a proposal on phased-out interest deductions for consumption loans without collateral in order to curb unsecured loans. These proposals are part of the measures that the Government presented in January.
Mr. Speaker! A functioning financial system is an important part of a resilient civil defense. It can also strengthen the ability to handle difficult stresses in peacetime. According to the new Riksbank Act, the Riksbank has a responsibility to ensure that the public can make payments both in crisis situations occurring during peacetime and in situations where high alert prevails. Among other things, the Riksbank shall contribute to ensuring that there is access to cash to a reassuring extent throughout Sweden.
Financial stability and financial market issues
Finally, I want to focus on another important area, namely bank fraud. The wave of fraud where criminal networks target the most vulnerable in society must be taken much more seriously. The situation is alarming with more and more reports of a cynical and systematic exploitation of people's vulnerability and loneliness. The victims are in many cases elderly people, who sometimes lose their entire life savings.
A question that has become increasingly relevant concerns the banks' responsibility in cases of fraud. Today, we have a high degree of digitalization within the banking sector. More and more transactions are carried out digitally by the customers themselves. Digitalization is good, but unfortunately, security has not kept pace with the development. We can see that an imbalance has arisen between the customer and the bank. Much responsibility has been shifted to the customer, who now bears the risk. We Kristdemokrater believe that the banks need to take greater responsibility to prevent this crime. Therefore, we want to investigate the question of tightening the banks' financial liability in cases of fraud so that they will create safer payment systems.
Countering organized crime is one of the Christian Democrats' and the government's most prioritized issues. Combating bank fraud that feeds criminal gangs and affects the most vulnerable and susceptible people in society is an important part of this work.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.