A stable, well-functioning financial market for allA stable, well-functioning financial market for allRecent news
We list here recent news from the banking sector.
2017
FI recognises the risk weight floor for Finnish mortgage exposures
Finansinspektionen has passed a decision to recognise the Finnish supervisory authority’s decision to implement an average, firm-specific risk weight floor of 15 per cent for Finnish mortgage exposures.
More efficient handling of applications to use the IRB approach for credit risk
Finansinspektionen (FI) is changing its procedure for handling of applications for permission to use the IRB approach for credit risk.
FI establishes an innovation centre
FI is establishing a fintech innovation centre that will provide information to and maintain a dialogue with companies conducting innovation-based business. This centre and additional initiatives are presented in FI's report to the Government regarding an assignment.
Stability in the Financial System (2017:2)
The Swedish economy continues to be strong and interest rates are extremely low, which contributes to high asset prices and low risk premiums. As global interest rates rise in the future, there is a risk for an abrupt increase in risk premiums and a fall in asset prices, which could be stressful for the financial system.
Capital requirements of Swedish banks as of the third quarter 2017
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the third quarter 2017.
Proposal for a stricter amortisation requirement for households with high loan-to-income ratios
FI is proposing changes to Finansinspektionen’s regulations (FFFS 2016:16) regarding amortisation of loans collateralised by residential property. The regulations cover mortgages granted by credit institutions, i.e. banks and credit market companies.
Erik Thedéen: Incentives vs. risk
“The fundamental problem is the potential conflict that inherently arises from the interplay between economic incentives and excessive risk-taking”, said Erik Thedéen in a speech on Thursday at the School of Business, Economics and Law at the University of Gothenburg. Erik Thedéen analysed the causes underlying this problem and presented some of the measures introduced to mitigate it.
Decision regarding the countercyclical buffer rate
FI decided on 25 October not to change the countercyclical buffer rate. The buffer rate of two per cent, which has applied since 19 March 2017, shall thus continue to apply.
Information about forthcoming periodic reporting in accordance with Finansinspektionen’s regulations FFFS 2017:11
On 1 August, the new Money Laundering Act entered into force as well as FI’s new regulations. According to these new regulations, firms under FI’s supervision must report data that enables FI to assess the risk that firms will be used for money laundering and the financing of terrorism.
Commercial real estate and financial stability
FI:s director general Erik Thedéens speech about commercial real estate and financial stability held at the conference DI Bank in Stockholm 10 maj 2017.
Comments on Nordea's decision to move its head office
Nordea passed a decision today to move its head office to Helsinki. The bank represents a large part of the Swedish financial market, but it is too early to say how the decision will impact Finansinspektionen’s supervision.
Banking capital in times of stress
Erik Thedéen, FI's Director General, speech at the UBS conference: 20th Annual Nordic Financial Services Conference in Stockholm.
Capital requirements of Swedish banks as of the second quarter 2017
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the second quarter 2017.
FI’s Pillar 2 capital assessment method for systemic risk associated with securitisation
Finansinspektionen considers it to be necessary to implement a back-stop within Pillar 2 to limit effects on the total credit supply from systemically critical securitisation. FI is publishing today a method that it intends to use during its capital requirements assessment.
FI:s response to the EU Consultation on FinTech: A more competitive and innovative European Financial Sector
Finansinspektionen has responded to the Commission Consultation Document on FinTech: A more competitive and innovative European Financial Sector.
FI’s view on financial stability and the risks for financial imbalances
Erik Thedéen visited the Committee on Finance today for a Q&A session. He discussed the unprecedented economic conditions that Sweden is currently experiencing.
Capital requirements of Swedish banks as of the first quarter 2017
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the first quarter 2017.
Swedish banking requirements for financial stability should be safeguarded
The design of the Swedish regulations for capital adequacy and crisis management is appropriate for reducing the risk of financial crises and ensuring effective management if a crisis were still to occur. This is the conclusion reached by Finansinspektionen (FI) and the Swedish National Debt Office in a joint report. The report emphasises that Sweden should safeguard national discretions in the framework of banking requirements in ongoing EU negotiations.
Decision regarding the countercyclical buffer rate
FI decided on 27 April not to change the countercyclical buffer rate. The buffer rate of two per cent, which has applied since 19 March 2017, shall thus continue to apply.
Updated categorisation of Swedish credit institutions
FI has updated its supervision categorisation of Swedish credit institutions for 2017. Two credit institutions have changed category.
Erik Thedéen speaks to EU Parliament about new banking rules
Erik Thedéen is commenting today on the EU Commission’s proposed changes to banking regulations during a Q&A session in Brussels in EU Parliament’s Committee on Economic and Monetary Affairs (ECON).
Supervision of the banks
This year’s supervision report describes, at an overarching level, the Swedish banking system, how FI works with supervision and a number of topical risk areas currently in focus.
FI Analysis 10: Amortisation requirement reduced household debt
This FI Analysis shows that the amortisation requirement has helped households with new mortgages change their behavior. New mortgagors are taking smaller mortgages than what they would have done if FI had not implemented the amortisation requirement. These households are also buying less expensive homes.
The Swedish Mortgage Market (2017)
Household debt is a crucial matter which FI monitors closely, and the mortgage survey is an important part of this work. Household debt has increased sharply in recent years. During the same period, mortgage rates have fallen and are now at historically low levels, and house prices have also risen rapidly. Finansinspektionen (FI) judges there to be an elevated risk that house prices will fall compared to a normal state, and it is more likely that interest rates will rise than that they will fall.
Decision regarding the countercyclical buffer rate
FI decided on 29 March 2017 not to change the countercyclical buffer rate. The buffer rate of two per cent, which has applied since 19 March 2017, shall thus continue to apply. The countercyclical buffer guide is set at 0 per cent.
FI Analysis 9: Households’ interest rate adjustment periods – an economic vulnerability?
SUMMARY: In Sweden, both the percentage of mortgages that have a variable interest rate and household debts have risen sharply. This combination has made house-holds sensitive to rising interest rates.
Capital requirements of Swedish banks as of the fourth quarter 2016
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the fourth quarter 2016.
FI’s view on automated investment advice
It is likely that automated services will play a greater role on the financial market. Finansinspektionen (FI) views an online market with simplified investment advice as a step in the right direction in terms of achieving an independent market for investment advice that reaches a wide number of consumers.
2016
FI’s capital assessment method for securitisation within Pillar 2
In this memorandum, FI describes its view of securitisation and the risks (primarily flowback) that FI sees and that are not taken into consideration in the banks’ current capital requirements.
Decision regarding reciprocation of macroprudential measures in two EU countries
FI has published decisions regarding reciprocation of macroprudential measures in Estonia and Belgium.
Biennial Review of the Systemic Risk Buffer
As outlined in the capital requirements directive, FI must review the systemic risk buffer on an biennial basis. FI has reviewed the arguments originally set out to support a SRB buffer level of 3% at consolidated level for the four major banking groups and finds the arguments to still hold today.
Calibration of stress test for the capital planning buffer
Finansinspektionen’s stress test method to determine the capital planning buffers for the major banks, credit market companies and securities companies is divided into general overarching methodologies and a specific calibration of risk parameters. The specific calibration of risk parameters can be changed by FI on a year-by-year basis.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
Capital requirements of Swedish banks as of the third quarter 2016
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the third quarter 2016.
FI Analysis 7: Leverage ratio as a minimum requirement reduces banks’ buffers
A leverage ratio requirement could contribute positively to financial stability during normal conditions in that it increases the robustness of banks' capital adequacy.
How can the financial sector contribute to sustainable development?
Finansinspektionen is publishing today two reports on sustainability. Together, they serve as the report to the Government that FI was tasked with earlier in the year on the continued work with sustainability issues, how these issues are linked to financial regulation and supervision and how supervision can contribute to sustainable development in a constructive manner.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
Resurs Bank receives a remark and an administrative fine
Finansinspektionen is issuing Resurs Bank AB a remark. The bank must also pay an administrative fine of SEK 35 million.
Capital requirements of Swedish banks as of the second quarter 2016
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the second quarter 2016.
FI decides on stress test methodology for determining the capital planning buffer
FI has now decided on the stress test methodology that will be used for determining the capital planning buffer for the largest Swedish bank companies. The methodology, which is described in more detail it in a new memorandum, is based on the proposal that FI published on the 9 May.
Swedish banks show resilience in European stress test
The major Swedish banks have resilience against a sharp deterioration of the economic environment. This is the result of an EU-wide stress test performed by the European Banking Authority (EBA).
FI aims for unchanged countercyclical buffer rate in September
The next occasion on which Finansinspektionen (FI) will decide on the countercyclical buffer rate is in September. FI’s Board of Directors has decided that the preparatory work ahead of the next decision shall focus on maintaining the rate at its current level, which is currently 2 per cent.
FI analysis 5: Macroeconomic effects of dept-to-income limits
House prices have been rising and, as a result, so has the debt of households in relation to their income – i.e. their debt-to-income (DTI) ratios. A DTI limit could slow this trend, but limiting households' opportunities to borrow would also slow consumption and economic activity.
FI reiterates its statement from the June 22 on Nordea
FI hereby clarifies that its public statement made on June 22, regarding the internal analysis which was unintendedly published in the media last week, is still valid:
FI monitors developments as they unfold
Finansinspektionen is monitoring the developments following the EU referendum in the UK. We are continuing to maintain a dialogue with the Ministry of Finance, the Riksbank and the Swedish National Debt Office and keep close contact with the Swedish banks. FI always has contingency plans in place to take measures that will contribute to financial stability.
FI agrees with EBA Opinion on accounts and bank services for asylum seekers
The European Banking Authority (EBA) published its Opinion of the European Banking Authority on the application of customer due diligence measures to customers who are asylum seekers from higher-risk third countries or territories. Finansinspektionen provides its response to the opinion below.
FI’s response to proposed new requirement for banks to ensure effective crisis managment
The newly implemented Resolution Act introduces new rules and requirements, including requirements about loss absorbing liabilities. In its response to the Debt Office’s proposal, FI says it is important that such new rules and requirements are consistent with Finansinspektionen’s (FI) supervision and the currently applicable capital requirements.
Capital requirements of Swedish banks as of the first quarter 2016
Note: Capital requirements of the Swedish banks, first quarter 1 2016 has been revised. The outcome of the 2015 SREP for Skandiabanken is now accounted for in this memorandum. No other changes have been done."
New methods for banks' risk weights and capital requirements decided
FI has formally adopted the supervisory methods which will be used in the supervision of the banks' internal models for corporate exposures. The banks should now assume that at least every fifth year is a downturn year in probability of default calculations.
Authorisation for Nordea to execute its merger plans
Nordea Bank AB has applied for authorisation to execute three merger plans. The mergers refer to the absorption of three wholly-owned subsidiaries that conduct banking and securities business respectively in Denmark, Finland and Norway.
Stress test methodology for assessment of the capital planning buffer
In this memorandum, FI accounts for the stress test methodology that it intends to use to assess the size of the capital planning buffer for the largest firms.
Consultation response regarding Review of the Riksbank's Monetary Policy 2010-2015
FI as submitted its consultation response regarding Review of the Riksbank's Monetary Policy 2010–2015 (2015/16:RFR6) conducted by Marvin Goodfriend and Mervyn King on commission from the Committee on Finance. The consultation response assesses the reviewers' recommendations regarding financial stability and the interplay between monetary policy and financial stability.
The Swedish Mortgage Market (2016)
The average debt-to-income ratio for households with new mortgages increased from 387 per cent to 406 per cent between 2014 and 2015, according to FI:s report.
FI aims for unchanged countercyclical buffer rate in June
The next occasion on which Finansinspektionen (FI) will decide on the countercyclical buffer rate is in June. FI's Board of Directors decided on 18 April 2016 that the preparatory work ahead of the next decision shall focus on maintaining the rate at its current level, two per cent.
Nordea applies for permission to merge its Nordic subsidiary banks
Nordea Bank AB (Nordea) has filed an application with Finansinspektionen to merge its wholly owned subsidiaries of Nordea Bank Norge ASA, Nordea Bank Finland Plc and Nordea Bank Denmark A / S with Nordea.
Pillar 2 capital requirements for maturity assumptions
FI intends to introduce a maturity floor of 2.5 years under Pillar 2 for banks authorised to use the advanced IRB approach for exposures to corporates.
FI's supervision of banks' calculations of risk weights for exposures to corporates
FI is implementing a new assessment method to evaluate the banks' calculations of risk weights both in general and for exposures to corporates.
FI proposes new framework for macroprudential measures
FI shall be entitled to propose measures, the Government shall approve the measures and the Swedish Parliamentary Committee on Finance shall evaluate FI's work. FI Director General Erik Thedéen is presenting this framework in a speech today.
Capital requirements of Swedish banks as of the fourth quarter 2015
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the fourth quarter 2015.
FI proposes partial waiver for covered bonds
Finansinspektionen proposes partial waiver from the requirements in Article 129 (1)(c) of the Capital Requirements Regulation (CRR) through a change in FI´s regulation (FFFS 2014:12) regarding prudential requirements and capital buffers.
FI open to raising the countercyclical buffer rate in March
The next occasion on which FI will decide on the countercyclical buffer rate is in March. FI's Board of Directors decided on 18 January 2016 that the preparatory work for the decision shall focus on enabling an increase in the rate if such is deemed necessary. The rate is currently at 1.5 per cent.
EBA's MDA Opinion does not change Pillar 2 in Sweden
In response to the Opinion published by the European Banking Authority (EBA) on 18 December 2015 regarding restrictions on distributions linked to the combined buffer requirement (Opinion of the European Banking Authority on the interaction of Pillar 1, Pillar 2 and combined buffer requirements and restrictions on distributions), Finansinspektionen would like to comment as follows.
2015
Environmental and sustainability perspectives in credit granting to companies
Finansinspektionen (FI) has been commissioned by the Government to report on the bank's internal rules regarding credit granting to companies from the perspective of the environment and sustainability. If necessary, FI shall present proposals for measures that can be included in the banks' credit granting process to promote such a perspective.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
FI Analysis 3: Liquidity in the market for covered bonds
The market for covered bonds is important for bank funding and therefore financial stability. The requirements for banks to hold more capital and liquidity for their operations have been tightened since the financial crisis. These requirements affect the banks' costs of holding securities in the trading book and so their costs of acting as market makers.
FI increases transparency in capital requirement for Swedish banks
FI today disclosed for the first time the actual capital requirements for the ten largest Swedish banks and credit institutions at the end of the third quarter of 2015. This is to increase clarity with regard to the effects of FI's capital requirements, including Pillar 2.
Measures against risks from household indebtedness
Summary of the speech by Finansinspektionen's Director General Erik Thedéen at the Centre for Business and Policy Studies' seminar on the economic situation on 19 November 2015.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
Capital needs of Swedish banks as of the second quarter 2015
Finansinspektionen publishes the capital needs of the ten largest Swedish banks and credit institutions as of the end of the second quarter 2015.
Recognition of other Member States' countercyclical buffer rates
Finansinspektionen decides to recognize countercyclical buffer rates up to 2.5 per cent that are set by the designated authority of another EEA country. The firms concerned shall use these buffer rates to calculate their firm specific countercyclical capital buffers.
