Negative interest rates in Sweden, Switzerland, and Denmark are having unintended consequences, with Sweden at risk for a housing bubble, according to Moody’s Investors Service.

Sweden’s central bank in February 2015 became the first major monetary authority to cut interest rates below zero, following the lead of Switzerland and Denmark, which turned negative in a bid to stimulate inflation and halt the punishing appreciation of their currencies.

The three countries’ key policy interest rates are currently -0.75% in Switzerland, -0.65% in Denmark, and -0.5% in Sweden.

In a new report, Moody’s said the Danish and Swiss central banks have achieved their main objective but the Swedish Riksbank had not been successful in engineering higher inflation.

“At the same time, the unintended consequences of the ultra-loose monetary policy are becoming increasingly apparent — in the form of rapidly rising house prices and persistently strong growth in mortgage credit,” Kathrin Muehlbronner, a senior vice president at Moody’s, said in a news release.

In all three countries, Moody’s said, households are highly leveraged, and while they also have high levels of financial assets, returns on these assets will be under increasing pressure if the negative interest and yield environment persists.

The ratings agency is not overly concerned about Switzerland and Denmark as it considers these trends as “unavoidable” side effects of an otherwise successful policy.

However, Moody’s believes the situation is different in Sweden, predicting that the Riksbank “will find it difficult to achieve its objective of significantly pushing up consumer price inflation in a deflationary global environment, while the sustained and strong growth in mortgage lending and house prices risks leading to an (ultimately unsustainable) asset bubble.”

Negative interest rates are meant to encourage banks to lend money out rather than park it for safe-keeping. The Bank of Japan also went negative in January and U.S. Federal Reserve Chair Janet Yellen recently said the central bank was considering cutting interest rates below zero as a way to stimulate the economy.

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