Sweden’s financial watchdog is proposing tighter rules for people taking out new mortgages as the country seeks to manage rising levels of household debt, The Wall Street Journal reported. Finansinspektionen, the Swedish financial supervisory authority also known as FI, said Tuesday it plans to make it mandatory for those taking out mortgages over 50% of the value of a property to pay the mortgage down over a period of time. Those whose mortgage is over 70% of the value of the property will be expected to pay the loan down by 2% a year until it falls to 70%, FI said.

Cash-strapped China's National Electric Vehicle Sweden (NEVS) said on Wednesday it would lay off up to 200 staff at its Saab car plant in Sweden as production is unlikely to resume anytime soon, Reuters reported. NEVS, which bought the bankrupt Swedish carmaker Saab in 2012, halted already-low output in May because of a shortage of money. In August, it obtained protection from creditors through a Swedish court while trying to secure funding.

A Swedish court on Thursday rejected an application from China's National Electric Vehicle Sweden (NEVS), which bought bankrupt car maker Saab in 2012, for protection against creditors while it concludes funding talks, Reuters reported. The court called the solutions NEVS had outlined to secure funding "vague and completely undocumented," casting further doubt over the long-term future of the company, which has not built any cars in recent months due to a shortage of money.

Sweden’s central bank sounded the alarm on the Nordic country’s huge household debt burden amid an acrimonious debate on whether it should instead be focusing more on fighting deflation. The Riksbank, the world’s oldest central bank, published a study on Wednesday that it claimed showed debt levels were higher than feared, with the average indebted Swede owing 296 per cent of their annual income while the average mortgage holder owed 370 per cent.

The Riksbank, the world’s oldest central bank, has become a sadist in its use of monetary policy, according to Nobel Laureate Paul Krugman, Bloomberg News reported. He says the Stockholm-based central bank’s bias toward tight policy during the financial crisis was a “terrible mistake” that now risks creating a Japan-style deflationary spiral. The criticism has the potential to weaken the exchange rate as international investors “question the Swedish economic development,” according to SEB AB, the Nordic region’s biggest currency trader.

Three years ago Sweden was regarded as a role model in how to deal with a global crisis. The nation’s exports were hit hard by slumping world trade but snapped back; its well-regulated banks rode out the financial storm; its strong social insurance programmes supported consumer demand; and, unlike much of Europe, it still had its own currency, giving it much-needed flexibility. By mid-2010 output was surging, and unemployment was falling fast. Sweden, declared The Washington Post , was “the rock star of the recovery”. Then the sadomonetarists moved in.

The new owners of Swedish car maker Saab, National Electric Vehicle Sweden AB, will restart production of the 9-3 sedan on Monday at the Trollhattan factory in Sweden, a NEVS spokesman said on Friday, Reuters reported. The 9-3 sedan will be powered by a turbocharged gasoline engine and built in "small and humble numbers" for China and Sweden, NEVS spokesman Mikael Ostlund said. The move comes almost two years after Saab, which had made cars since 1947, filed for bankruptcy at the end of 2011.

Sweden's Volvo Group, the world's second biggest lorry manufacturer, announced Tuesday a 5 billion kronor (580 million euros, $780 million) restructuring plan over two years, the Economic Times reported. "The programme encompasses both reduction of white collar employees and consultants and efficiency enhancements in the global industrial system," the company wrote in a statement, without indicating the number of jobs affected. The Volvo Group, which also makes buses, construction equipment and engines, indicated that the restructuring would mainly concern its lorry business.

Swedish prosecutors have questioned the former head of bankrupt car maker Saab and two others in an investigation into suspected tax offences relating to the running of the company, officials said on Tuesday, Reuters reported. Prosecutors are looking into allegations that executives at Saab, which collapsed in 2011, obstructed proper tax checks over the years 2010 to 2011, a turbulent time for the company, when it was sold by General Motors to small Dutch sports car maker Spyker, and when problems which led to its collapse emerged.

A Swedish prosecutor says three former executives of automaker Saab Automobile AB have been arrested on accounting fraud charges, the Associated Press reported. Prosecutor Olof Sahlgren says the three are "suspected of aggravated attempts to avoid tax controls" by allegedly falsifying parts of Saab's accounts between 2010 and 2011 - a crime that carries a sentence of up to four years in prison. Sahlgren wouldn't identify the three, who worked for Saab while it was owned by Dutch luxury car maker Spyker, which had bought the Swedish company off General Motors.