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April 18 (Reuters) - The Swedish government should set the framework for the individual tools for combating financial imbalances but the financial watchdog should decide on their application, the central bank said in an opinion on a government proposal on Tuesday.
The centre-left government has been looking at a proposal to widen the Financial Supervisory Authority's powers since 2015, when the watchdog was forced to postpone the implementation of tougher mortgage rules after a legal challenge.
Under the proposal the watchdog must obtain government approval before adopting regulations aimed at preventing financial imbalances in the credit market.
"The Riksbank proposes that the Government sets the framework for the individual tools, while Finansinspektionen decides on their application," central bank governor Stefan Ingves said in an opinion on the proposal published on the central bank's webpage. (Reporting By Johan Ahlander; editing by Niklas Pollard)