STOCKHOLM, Jan 28 (Reuters) - Expectations that ultra-low interest rates will continue over the long term could lead to problems in the economy, Swedish central bank Governor Stefan Ingves said on Tuesday.
Ingves highlighted concerns that risk-taking could increase, that assets could become over-valued, and that indebtedness, particularly household borrowing, could rise to unsustainable levels.
“Expectations of low interest rates for a long time may lead to challenges for financial stability,” Ingves said in a statement released ahead of a parliamentary hearing.
The Riksbank raised its benchmark repo rate to zero in December, after nearly five years in negative territory. It expects rates to remain unchanged for the foreseeable future.
Reporting by Simon Johnson; Editing by Catherine Evans