Result

2019

FI Analysis 18: Swedish risk premia and monetary policy

A disorderly and abrupt increase in international market rates could lead to significantly higher term and equity risk premia. This is the conclusion of an analysis conducted by FI.

Liquidity coverage ratio requirements and diversification of the liquidity buffer

FI presents its view on the specific requirements for liquidity coverage ratios in individual currencies. The authority also provides its interpretation of the diversification requirement on the liquidity buffer’s composition for Swedish covered bonds. FI will apply this approach to its supervision of banks belonging to Supervision Categories 1 and 2 on 1 October 2019.

ESRB recommendation to Sweden for vulnerabilities in the residential real estate sector

2019-09-23 | ESRB Mortgage News

The European Systemic Risk Board (ESRB) has issued warnings to five EEA countries and recommendations to six EU countries for medium-term vulnerabilities in their respective residential real estate sectors. Sweden is one of the countries that receives a recommendation. The recommendation suggests appropriate actions to address the identified vulnerabilities. In 2016, the ESRB issued a warning to Sweden regarding risks in the residential real estate sector.

Erik Thedéen: Climate and sustainability in focus at FI

FI’s Director General spoke today at the Finansdagen conference in Stockholm.

Capital requirements of Swedish banks as of Q2 2019

Finansinspektionen publishes the capital requirements of the largest Swedish banks and credit institutions that belong to supervisory categories 1 and 2 as of the end of Q2 2019.

Decision regarding the countercyclical buffer rate

Finansinspektionen (FI) decided on 5 July not to change the countercyclical buffer rate. The buffer rate of 2.5 per cent, which will be applied as of 19 September 2019, shall thus continue to apply. The countercyclical buffer guide is set at 0.04 per cent.

Stability in the Financial System (2019:1)

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 and Financial Stability

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.

Requirement on IRB models for exposures to commercial real estate

FI has analysed the commercial real estate market and makes the assessment that it is vulnerable to shocks.

Banks’ lending to commercial real estate firms requires more capital

Finansinspektionen (FI) considers the firms in the Swedish financial system to have sufficient resilience for withstanding a weaker economy. However, commercial real estate firms are vulnerable to shocks. FI therefore makes the assessment that the banks need more capital for these exposures. This is one of the conclusions in FI’s first stability report for the year, which is being presented today.

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