The majority of consumption loans (non-mortgage loans) are small and have a high interest rate and a short maturity. However, it is households with large loans that represent the largest share of new lending, and these loans are growing at the fastest rate. The households with the highest income take out the largest loans. If the interest rate increases, many borrowers will need to use a large part of their income to make their interest and amortisation payments. This is evident in Finansinspektionen’s (FI’s) analysis of consumption loans, Swedish Consumption Loans.
Both the global and the Swedish economies appear to be slowing down. Low interest rates – which have resulted in high risk-taking and rising asset prices – are expected to remain low for a prolonged period of time. Resilience in the Swedish financial system is satisfactory in general. However, even if the banks’ resilience is satisfactory overall, FI makes the assessment that they need more capital to cover the risks in their lending to commercial real estate firms.
The commercial real estate market plays a key role in financial stability. The financial position of commercial firms is currently satisfactory, but many firms are vulnerable to higher interest rates and weaker economic growth.
In this report, Finansinspektionen (FI) presents the most prioritised consumer risks it has identified for 2019. FI also presents the experiences from its consumer protection work over the past year. Finally, FI identifies two areas on the financial market where consumer protection is clearly deficient and proposes regulatory changes to fill these gaps.
High debt can mean risks for individual households, banks, financial stability and macroeconomic development. The mortgage survey serves as an important basis for the assessment of the risks associated with household debt.
Under FI's stricter amortisation requirement, which went into effect on 1 March 2018, new mortgagors with debt in excess of 450 per cent of gross income must amortise 1 percentage point more of their loan per year in addition to the existing requirement. The objective of the stricter requirement is to strengthen resilience of households by decreasing the number of mortgagors who have high debt in relation to their income.
This FI Analysis describes how Swedish covered bonds function, how the regulation governing the cover pool is designed and how the cover pool is affected by a fall in house prices.
A new report from Finansinspektionen and the Swedish National Debt Office shows that the value of an implicit state guarantee for the major Swedish banks has decreased since the financial crisis in 2008–2009. This decrease is due to higher capital and liquidity requirements on the banks, a new regulation for managing banks in crisis and improved market conditions.
Finansinspektionen (FI) has conducted a survey of the management of market risks by savings banks and of their holdings in financial assets. FI’s assessment is that the majority of savings banks are managing their market risks in an acceptable manner.
Several banks are working to develop and enhance their information and cyber security. Some have not yet fully adapted their work to the changed conditions introduced by increased digitalisation and an increased level of cyber threats. FI expects that the banks will continue to focus on developing their information- and cyber security abilities, and keep managing and monitoring their information and cyber risks.