Bank of Finland Governor calls for cap on housing loans
Bank of Finland Governor Erkki Liikanen has called for a cap on the size of housing loans to help borrowers avoid a debt cycle. The central banker said Finland should learn from the collapse of the banking sector in Spain following of the collapse of construction and housing bubble.
Central bank governor Erkki Liikanen said that Finnish authorities should consider granting housing loans for only part of the value of a property.
He pointed out that Spain should provide a warning as to what can happen when borrowers become over indebted. “A rapid increase in housing prices is a recipe for a crisis, which always follows when prices fall sharply. Ordinary people, the economy and the banks suffer,” Liikanen said in an MTV3 interview on Friday.
Liikanen said that the crisis has taught that banks should be supervised as an entire sector, so that risks faced by the sector could be detected.
In spite of the protracted euro zone crisis, in which Spain now appears to be in danger of asking for a government bailout, Liikanen said that the Finnish economy had managed well, but he warned of “external threats”.
ECB bond purchases show ECB 'can act'
Liikanen -- who is also a member of the European Central Bank’s governing council -- defended an announcement by the European Central Bank yesterday, indicating that it would intervene in European financial markets to buy government bonds on the secondary market.
It is believed that purchasing the bonds would help lower the high interest rates facing cash-strapped euro area governments such as Italy and Spain.
Finland has opposed such a measure, saying that it only delivers temporary results, and that it consumes too much of the capital in the European Union’s temporary and permanent bailout funds.
Governor Liikanen said the proposed bond purchases show the ECB can act and is prepared to act to defuse the eurozone crisis.
Latest in: News
Siegfrids hopes for Eurovision success
The Danish pre-contest favourite believes that this could be Scandinavia’s year, while Finnish contestant Krista Siegfrids promises to celebrate whether she wins or not.
Lions’ golden dream dies in Stockholm
Finland’s mens ice hockey team lost 3-0 in their World Championship semi final against Sweden on Saturday in Stockholm. The Lions will play in the bronze medal match on Sunday.
Summery, thundery conditions continue over the weekend
Summer has finally arrived in Finland, with warmer than average temperatures and some lively bursts of thunder expected. That means the south and east of Finland are set for warm weather—and rain—this weekend.
SDP chair rejects calls to appoint new Foreign Minister
Social Democratic Party chair and Finance Minister Jutta Urpilainen has rejected calls to appoint a new Foreign Minister, saying that incumbent Erkki Tuomioja is “the right man” for the job. The demands followed Urpilainen’s decision Friday to shake up the party's cabinet lineup.
Restaurant Day celebrates Finland’s growing culinary diversity
A group of hard-boiled food enthusiasts has cooked up the ninth Restaurant Day, which takes place Saturday. The idea has been to feed a grass roots movement celebrating food, fellowship and community. Today’s festival of culinary delights involves more than 1,500 so-called pop-up restaurants in Finland and beyond.
Bus drivers’ strike continues through the weekend
Bus drivers who shut down their engines and walked off the job at a Vantaa bus depot last Tuesday will continue their work stoppage through the weekend. The drivers are protesting plans to introduce a new shift system, which they say provides inadequate rest periods. Employer and employee representatives have had no success resolving the impasse.
"Russian Google” Yandex sets up in Mäntsälä
One of the world’s largest search engine providers has announced plans to fast track construction of a server centre in Mäntsälä, in southern Finland. Yandex, also known as the “Russian Google” says Finland is an ideal location for a server hub, partly due to competitive energy prices.
Finnish cabinet now running on woman power
The SDP cabinet reshuffle announced Friday has transformed the makeup of Finland’s cabinet, tipping the balance in favour of women. The government’s ministerial lineup now features ten women and nine men. Finland was previously led by a majority female government during Matti Vanhanen’s second term and by his successor Mari Kiviniemi.
Finland’s ”gay” Eurovision entry leaves Georgians cold
Thousands of supporters gathered in the Georgian capital Tblisi for a major gay rights demonstration in support of the Eurovision song contest and in honour of this year’s International Day against Homophobia. The backdrop to the demonstration has been outrage caused in the traditionally conservative country by a girl-on-girl kiss in the climax of the performance of Finnish Eurovision competitor Krista Siegfrids.
SDP Chair Urpilainen: Cabinet changes to continue
SDP chair and Finance Minister Jutta Urpilainen thanked her party’s ministers for their efforts following the announcement of a re-assignment of portfolios Friday. The new ministers are to be confirmed in their posts by the President next week. Urpilainen said that other changes are in the offing for the party's ministerial group.
