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(Foto: Christian Steffensen, TV 2 Nettavisen)

Foss fears debt crisis among young people

The Norwegian Minister of Finance fears a debt crisis among young people as they borrow beyond the means and forgot the possible consequences of an interest increase.

Finance Minister Per-Kristian Foss has asked the Banking, Insurance and Security Commission of Norway to check and make sure bank costumers receives enough information regarding what an increase in interest may cost them.

Norwegians’ total dept increased with almost NOK 123 million (USD 17.9 million) or 11.9 percent last year. Foss said he fears that especially young people with a fragile economy may get financial problems when the interest rate increases, and he stressed that banks are obligated to advice people against things that may not be in their best interest.

«Those who borrow for housing must take into account that the low interest level is not going to last,» Foss said. «We wish to survey the lending practice and see if the upper level holds in light of an interest increase. It’s the banks duty to inform, and they can say no.»

The minister said he would also ask the Banking, Insurance and Security Commission of Norway to crack down on finance institutions that have a too large share of loans extending 80 percent of the property value.

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