Nordic Regional Report: Selected Issues
IMF Staff Country Reports, September 5, 2013
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- Nordic Regional Report: Selected Issues
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Bibliographic details
- Published: September 5, 2013
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484391556.002
Overview
- Publication date: September 5, 2013
- Purpose: This Selected Issues paper elaborates findings and discussions of the 2013 Cluster Consultation Nordic Regional report.
- Geographic focus: Denmark, Finland, Norway, and Sweden (referred to as the Nordic-4).
- Core theme: Analysis of close economic and financial ties among the Nordic-4, common challenges, and shared risks, notably large banking sectors and high household debt.
Key findings
- The economic performance of the Nordic-4 ranks among the advanced economic development circle.
- Large Nordic banking systems support relatively high levels of private sector debt.
- House price developments in the Nordic-4 pose a risk to broader macroeconomic stability in the context of strained household balance sheets.
Risks and vulnerabilities
- Banking sector concentration: Large banking sectors across the Nordic-4 are linked to elevated private sector indebtedness.
- Housing market risk: Movements in house prices represent a potential threat to macroeconomic stability given household balance sheet strain.
- Shared exposures: Close economic and financial ties imply that shocks in one Nordic-4 economy could have spillovers to the others.
Policy implications and areas for attention
- Monitor and address banking-sector vulnerabilities that sustain high private sector debt.
- Closely track house price developments and household balance-sheet indicators to assess systemic risk.
- Consider policy tools aimed at mitigating risks from elevated household debt and housing-market imbalances.
Subject areas and keywords (as listed)
- Subject: Banking, Commercial banks, Covered bonds, Deposit insurance, Disposable income, Financial institutions, Housing, Housing prices, National accounts, Prices
- Keywords: asset price approach, bank assets, bank capital buffer, bank lending, banking sector, banking system, Commercial banks, Covered bonds, CR, Disposable income, fiscal policy, fund staff calculation, Global, house price, Housing, Housing prices, ISCR, parent bank, valuation gap
Content in this bundle
- Nordic Regional Report: Selected Issues; IMF Country Report 13/275; July 31, 2013