The Swedish Social Democrats have proposed using the state-owned mortgage lender SBAB to put pressure on banks to lower their mortgage rates, according to a report from Bostadspolitik. The party has indicated it is open to accepting a lower return on equity from SBAB to achieve this goal.
The proposal, reported on Friday, is part of the party's broader housing policy platform. By adjusting the requirements placed on SBAB, the Social Democrats believe the lender could offer more competitive rates, which would in turn force private banks to follow suit, Bostadspolitik reports.
SBAB is fully owned by the Swedish state, which gives the government direct influence over its business strategy and financial targets. The Social Democrats' suggestion would involve easing the profitability demands placed on the lender, allowing it to operate with thinner margins than commercial competitors.
