In connection with the Riksbank’s interest rate cut on 20 August, the major Swedish banks have lowered their lending rates. But it is going too slowly, according to the non-profit organization Sweden’s Consumers.
– This is exactly what we feared would happen. We saw at the first interest rate cut last spring that the banks hesitated to lower it by the same amount, says communications manager at Sweden’s Consumers, Yasemin Bayramoglu, and continues:
– It is incredibly provocative considering that many consumers have had an extremely tough time in recent years with inflation, high food prices and very expensive mortgages and large rent increases.
Rockets and feathers
Within national economic research there is the concept of “rockets and feathers”, i.e. rockets and feathers. It’s about the fact that researchers have shown that major international banks are regularly as fast as rockets in raising mortgage interest rates when central banks raise the key interest rate. But when the policy rate is lowered, then the banks follow downwards as slowly as springs fall.
According to Sweden’s consumers, the same pattern is visible in Sweden, most recently after the Riksbank’s August cut.
– The banks are once again trying to impress their customers by withholding interest rate cuts or part of them, says Yasemin Bayramoglu.
The Swedish banks’ profit margins are unusually high from a European perspective. In a study by the Swedish Bank Association from October 2023, Sweden ranks highest in relation to comparable countries. During the second quarter of this year, when the Riksbank made its first interest rate cut in a long time, the four major banks made a combined profit before tax of just over SEK 50 billion.
SVT has sought the managers of the four major Swedish banks and the Banking Association for interviews – but today no one wants to talk about the interest rate cuts and profits.
– Change banks! That’s the advice we give all the time, but we know it’s hard for many consumers to do. Many more would have to do it, but it is tough, says Yasemin Bayramoglu.