Stability in the Financial System

FI makes the assessment that the resilience of the financial system in Sweden is satisfactory, but vulnerabilities remain. The Swedish banks have buffers, but they fund themselves in capital markets, which makes the banking system vulnerable to shocks to confidence. Liquidity in systemically important securities markets has not changed in recent years.

House prices are not rising at the same rate as before, but household debt is continuing to rise rapidly. Highly indebted households are primarily a risk for economic stability since they potentially could sharply reduce their consumption and thus exacerbate a future economic downturn.

FI is now implementing an amortisation requirement, and a loan-to-income cap could prevent the risks associated with household indebtedness from continuing to rise

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