High private debt imperils financial stability in Norway, research finds
Households most at risk of shrinking their expenditure account for 50% of private consumption
A decline in house prices or higher rates could reduce the expenditure of the Norwegian households most exposed to higher debt and imperil financial stability, a research paper published by Norges Bank finds.
Household debt and links to the housing market. Consequences for financial stability by Kjersti-Gro Lindquist, Haakon Solheim and Bjørn Vatne explains that household debt in Norway has grown faster than incomes for a prolonged period of time.
“Higher debt increases the probability that
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