STOCKHOLM, May 29 (Reuters) - Sweden’s economy is strong but the financial sector remains sensitive to shocks due to high levels of household debt and asset prices, the financial watchdog said on Tuesday.
“The strong economic growth has ... resulted in greater optimism, high asset prices and high debt, the FSA said in its twice-yearly Financial Stability Report.
“This increases sensitivity in both the financial system and the economy at large.”
The FSA also said that there were signs that liquidity is a problem in parts of the bond market. (Reporting by Stockholm Newsroom; Editing by Simon Johnson)