IMF says financial instability growing concern for Sweden

STOCKHOLM, June 13 Fri Jun 13, 2014 3:13am EDT

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STOCKHOLM, June 13 (Reuters) - The International Monetary Fund (IMF) said on Friday financial instability was an increasing concern for the Swedish economy and urged a comprehensive set of macro-prudential measures to temper soaring mortgage debt among households.

"Financial instability is an increasing concern," it said in its annual review of the Nordic country published on the Swedish central bank's website.

"It is time for a comprehensive set of macroprudential actions that, gradually implemented, would help steer mortgage credit demand towards a sustainable path."

Sweden breezed through the European debt crisis due to its strong public finances but its central bank has lately struggled to reconcile inflation running far below target with efforts to curb a more than decade long boom in household lending.

IMF said the current monetary policy struck an appropriate balance between price and financial stability risks, but said changes - such as slipping inflation expectations - would warrant a shift in policy. (Reporting by Johan Ahlander and Niklas Pollard)

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