We therefore consider that the high oil price will subdue international growth to some extent in the coming year but will not entail any dramatic adjustment. However, the difficulty in assessing the effects of the high oil price does make this a central element in our picture of risks. Uncertainty still also prevails about the consequences of the saving imbalances in the world and above all the large deficit on the US current account. An adjustment of current-account balances would probably involve a weakening of the US dollar’s real exchange rate, through either lower US inflation relative to the rest of the world or a fall in the dollar. An adjustment of the imbalances would  4/5  also be likely to raise the very long-term interest rates. If these changes were to occur quickly and unexpectedly, there would be a risk of decreased world market growth. The Swedish economy Signals of an economic slowdown last spring were also evident in Sweden but in June we counted on the dip being temporary, with a subsequent renewal of growth. So far, the new statistics since then seem to confirm our assessment. The second-quarter national accounts show that growth strengthened about as much as we had expected. An acceleration seems to have begun in the growth of private consumption, accompanied by a continuation of the last year’s upswing in investment, with a spread from residential construction to the corporate sector in general.
Norman T L Chan: Strengthening risk management of banks in Hong Kong Statement by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, to the media, Hong Kong, 19 May 2017. * * * In view of the increasing risk of overheating in the property market, I would like to announce that the Hong Kong Monetary Authority (HKMA) has decided to introduce three new counter-cyclical prudential measures today to strengthen the risk management of banks. 2. The first measure requires those banks using Internal Ratings-Based Approach to  calculate capital charges for credit risk to raise the risk weight floor by 10 percentage points from the existing level of 15% to 25% for new residential mortgage loans. 3. The second measure requires banks to lower the applicable loan-to-value ratio (LTV) cap by 10 percentage points for mortgage loans extended to applicants with one or more pre-existing mortgages. 4. The third measure requires banks to lower the applicable debt servicing ratio (DSR) limits by 10 percentage points for mortgage loans extended to applicants whose income is mainly derived from outside of Hong Kong. 5. These three measures take immediate effect. However, mortgage applications for transactions with provisional sale and purchase agreements signed today or earlier will not be affected. 6. Finally, I would like to remind the public that, for most people, buying a property is not only one of the most important decisions in life, it is also a financial transaction entailing significant leverage through borrowing.