Low interest rates have contributed to high risk-taking, rising asset prices and increasing debt. Higher interest rates in the next few years could reduce risk-taking and thus dampen the build-up of risk. However, unexpectedly large interest rate fluctuations and uncertain global developments could also test the financial sector’s resilience. These are some of the conclusions Finansinspektionen (FI) draws in this year’s second report on the stability in the financial system. The report will be presented at a press conference today.
Finansinspektionen (FI) grants Nordea Bank AB authorisation to execute its merger plan and thus move the bank’s head office to Finland.
The Swedish economy continues to be strong, and resilience in the financial system is satisfactory. However, a long period of low interest rates and strong growth has resulted in an elevated risk appetite, high asset prices and high debt. This makes the financial sector more sensitive to shocks, writes Finansinspektionen (FI) in the first Stability Report of the year, which is being presented today.
Finansinspektionen (FI) is issuing Solidar Fonder AB (Solidar) a warning. The company must also pay an administrative fine of SEK 10 million.
Household debt is continuing to rise. The number of new mortgagors with a high level of debt in relation to their income or the value of their home continues to be high. These are the conclusions drawn by Finansinspektionen (FI) from this year’s mortgage survey, which is being presented today. FI also highlights how tenant-owner associations’ debt increases the risks for households.
Anders Kvist has been named a Senior Advisor to FI’s Director General.
The oversight body of the Basel Committee, GHOS (Governors and Heads of Supervision), has agreed today after several years of work on key supplements to complete the global standards for banks’ capital adequacy. Finansinspektionen (FI) is a member of the Basel Committee and has participated in this project.
Finansinspektionen (FI) is presenting today its proposal for a stricter amortisation requirement. Following a decision by FI’s Board of Directors, the proposal is now being submitted to the Government for approval.
Finansinspektionen (FI) has found that SEB has reported transactions improperly and that there have been deficiencies in the internal control of transaction reporting. SEB is therefore being issued a remark and must pay an administrative fine of SEK 12 million.
Finansinspektionen’s report, Stability in the Financial System, shows that the high level of household debt and rising house prices are causing vulnerabilities to build up in the Swedish economy. FI therefore would like to introduce a stricter amortisation requirement for new mortgage holders who take large loans in relation to their income.
Over-indebtedness is at the top of the agenda at FI’s Consumer Protection Day, which is being held today, Thursday, 11 May. FI will also present its annual report, Consumer Protection on the Financial Market, which includes a review of the areas that FI is prioritising in terms of consumer protection supervision.
The amortisation requirement that was introduced last year has had a slow-down effect thus far. Households with new mortgages are borrowing less and buying less expensive homes, but the risks associated with high household debt remain.
Nasdaq Clearing AB is receiving a remark and must pay an administrative fine of SEK 25 million. Nasdaq Stockholm AB is receiving a remark and must pay an administrative fine of SEK 30 million.
Finansinspektionen (FI) reports its assessment of financial stability twice a year. At a press conference today, FI Director General Erik Thedéen and FI Chief Economist Henrik Braconier will present this year’s second stability report.
Finansinspektionen (FI) believes that securitisation can give rise to risks that are not considered in current regulation. FI is therefore submitting for consultation today the method it intends to use to assess banks’ capital requirement within Pillar 2 for flowback risks during securitisation.
Finansinspektionen (FI) is publishing two consultation memorandums today that will raise the capital requirements primarily for exposures to corporates for banks that use the internal ratings-based approach.
FI noted during the spring that Nordea's reported Probability of Default (PD) as a percentage of its corporate lending was larger than its estimated PD during certain years and in certain markets. In other words, actual PD was higher than the bank's estimated PD.
Finansinspektionen is issuing Resurs Bank AB a remark. The bank must also pay an administrative fine of SEK 35 million.
SvD published information today about FI's supervision of Nordea and the banks' internal models. FI therefore sees a need to describe and make certain clarifications about its supervision and how the capital assessment for Nordea has been handled.
SvD is publishing an article today about information in a memorandum written by FI regarding Nordea's capital needs. SvD did not receive the memorandum from FI. As a result, the confidentiality assessment that FI is obligated to conduct pursuant to the Public Disclosure and Secrecy Act has not been conducted.
Household debts are continuing to develop in an unfavourable direction. This is one of the conclusions in FI's Stability Report, which is being published today.
Nordea Bank AB (Nordea) has applied to Finansinspektionen (FI) for authorisation to execute plans under which its wholly-owned subsidiaries in Denmark, Finland and Norway will be merged with Nordea and thereafter be operated as branches. FI has decided to grant Nordea authorisation.
The higher degree of digitalisation can lead to more cost-efficient solutions for both consumers and financial companies. However, it is important to safeguard consumer protection.
New mortgages must be amortised down to 50 per cent of the value of the residential property. The amortisation requirement will apply to all new loans that are collateralised by a residential property. The property may be revalued every fifth year.
Swedish households are borrowing more in relation to their income. Despite this, they have in general sufficient margins to make their payments. FI presents these and other conclusions in this year's Mortgage Survey, which is being published today.
FI's Board of Directors has decided to raise the countercyclical capital buffer to 2 per cent as of 19 March 2017.
Today FI will submit a report to the Government about how climate change may affect financial stability.
Trig Social Media AB has, in an interim report, on a number of points neglected the provisions regarding periodic financial information. Finansinspektionen has therefore decided to issue the company with a caution for having breached the accounting rules.
FI today sends out a proposal which requires amortization of mortgages. The proposal is that new mortgage holders must pay their mortgages down to a 50 per cent loan-to value ratio. Starting on 1 June 2016, the amortization requirement will apply to all new loans which are collateralized by a home.
Resilience in the Swedish financial system is satisfactory. However, the sharp rise in housing prices means that household debt is growing rapidly. This development entails an increase in the risks to economic stability. It is therefore necessary to be prepared to take further measures.