A stable, well-functioning financial market for allA stable, well-functioning financial market for allCapital requirements for Swedish banks
2020
New procedures to enhance transparency
As of 1 January 2021, FI will implement new procedures for how it announces opened and closed supervision investigations.
Financial firms must be restrictive with dividends until September 2021
In light of the economic uncertainty caused by the ongoing coronavirus pandemic, FI expects banks, including credit institutions and other financial firms such as insurance companies, to be restrictive with dividends and share buybacks until 30 September 2021. During this period, total dividends from and buybacks by the banks should not exceed 25 per cent of their aggregate net earnings for the two financial years 2019–2020.
Reminder: what a hard Brexit will entail
What will happen in the event that the transition period ends without an agreement between the EU and the UK.
Macro-based stress test of Swedish banks: results and methodology, autumn 2020
Finansinspektionen (FI) presents in this memorandum a stress test of the Swedish banks that we conducted in the autumn of 2020. The results indicate that the major banks have significant resilience to the credit losses that could arise and also a capacity to maintain the supply of credit.
Stability in the Financial System (2020:2)
The pandemic has triggered a deep economic recession in many countries, even if a slight recovery has begun. Extensive support measures have mitigated the economic impact and reduced the uncertainty on the financial markets. During the autumn, infection rates have once again begun to increase and several countries have introduced new restrictions, which will dampen the economic recovery, even though it is uncertain to which extent.
Dampened recovery can weaken financial stability
An increase in the spread of the coronavirus will dampen the recovery in European economies and, in the long run, this could impact financial stability, writes Finansinspektionen (FI) in this year’s second stability report, which will be published today.
Capital requirements of Swedish banks as of Q3 2020
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 Q3 2020.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) decided on 24 November not to change the countercyclical buffer rate. The buffer rate of 0 per cent, which was applied starting on 16 March 2020, shall thus continue to apply. The countercyclical buffer guide is set at 1.7 per cent.
FI Analysis 26: Macro-based credit loss model for major Swedish banks
Large credit losses can result in otherwise profitable banks reporting a loss. This FI Analysis describes a methodology for estimating how large credit losses can be in a stressed macroeconomic scenario.
FI has decided on a change in the application of banks’ capital requirements
FI has decided to change the application of capital requirements for Swedish banks in order to adapt to the EU’s so-called banking package.
European Commission approves extension of the risk weight floor for Swedish mortgages
The European Commission has announced that it does not intend to object to FI's intention to extend the current risk weight floor for Swedish mortgages. This means that FI may implement the measure.
FI Analysis 25: Interest rate deductions and households’ loans
The tax rebate for interest expenses – the interest deduction – means that households borrow more, and can and want to pay more for homes. This means that the households experience an increase in both their liabilities and assets, which in turn could have an impact on the stability of the financial system. In this FI Analysis, we calculate the impact of a change to the interest deduction. The reason for this analysis is the direct link between interest deductions and households’ loans.
FI Analysis 24: Stress test of bank lending to commercial real estate firms
Commercial real estate firms are sensitive to changes in interest rate expenses and income. Following a shock, vulnerable commercial real estate firms could lead to credit losses for the banks.
Bank dividends not appropriate until the situation has stabilised
As the crisis unrolled this past spring in full force, it required fast and extraordinary measures. For example, FI lowered the countercyclical buffer requirement for the banks and encouraged them at the same time to postpone their dividend payments until the situation had become clearer. During the autumn, FI repeated its message to the banks to not make any dividend payments in 2020.
Henrik Braconier's speech at SNS/SHOF Finance Panel: Corporate Finance in a Low Interest Rate Environment
Henrik Braconier, Chief Economist at FI, spoke on risks related to low interest rates at SNS/SHOF’s Finance Panel: Corporate Finance in a Low Interest Rate Environment.
FI Analysis 23: Can the bond market dampen the credit cycle?
The access of non-financial firms to credit is central for financial stability, particularly during financial crises. In recent years, the market for corporate bonds has grown steadily and currently plays an important role in firms’ financing. This analysis shows that it has not been easier to issue corporate bonds in Swedish krona during financial crises than to take a bank loan. This pattern deviates from previous research on the USA and the euro zone.
AK Nordic receives a remark and an administrative fine
Finansinspektionen (FI) is issuing credit market company AK Nordic AB a remark. The company must also pay an administrative fine of SEK 20 million.
AK Nordic AB receives a remark and an administrative fine
Finansinspektionen is issuing AK Nordic AB a remark. AK Nordic AB shall also pay an administrative fine of SEK 20,000,000.
Erik Thedéen's speech at Driving Global Standards on Sustainable Finance
Erik Thedéen, Finansinspektionen's Director General and Chair of IOSCO's Task Force on Sustainable Finance made a speech at the conference Driving Global Standards on Sustainable Finance.
Swedish Consumer Credit
Even though consumer credit only constitutes a small portion of households’ total credit, the interest rate and amortisation payments for these credits amount to more than half of the households’ total debt service payments. The analysis also shows that individual consumers are having difficulty paying for their consumer credit. Overall, this means that the consumer credit market could impact many households, which makes it important for consumer protection on the financial markets.
FI Analysis 22: Fewer high-cost short-term credits after new rules
After the provisions regarding high-cost short-term credits were changed in 2018 – in part by introducing an interest rate ceiling and cost ceiling – these types of loans decreased sharply. It is probable that the reform has led to a decrease in the supply of high-cost short-term credits. It is also evident that several companies have stopped offering such loans.
Credit checks must be improved
Large credits are growing, but the smallest credits are growing faster. More borrowers are having difficulty making their payments soon after the credits are granted, and these payment difficulties are more prevalent among younger borrowers than older borrowers. These are some of the conclusions from Finansinspektionen's report this year on consumer credit. These conclusions indicate that lenders’ credit checks are not working as they should, and FI is therefore now reviewing the guidelines.
FI proposes amended rules and a change in the application of banks’ capital requirements
FI is proposing regulatory amendments and a change in the application of capital requirements for Swedish banks in order to adapt to the EU’s so-called banking package.
FI confirms investigation into Swedbank
Swedbank has written in a press release that FI is investigating potential breaches of the Market Abuse Act. Given that the company has chosen to disclose information about the investigation, FI confirms that the information is correct. FI has opened an investigation.
FI notifies the EU regarding extension of the existing risk weight floor for Swedish Mortgages
Finansinspektionen has notified the EU Parliament, the Council, the Commission, the European Systemic Risk Board (ESRB) and the European Banking Authority (EBA) that it intends to adopt a decision to extend the current risk weight floor for Swedish Mortgages for a period of one year, in accordance with Article 458 of the CRR.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) decided on 9 September not to change the countercyclical buffer rate. The buffer rate of 0 per cent, which was applied starting on 16 March 2020, shall thus continue to apply. The countercyclical buffer guide is set at 1.3 per cent.
Continued grounds for suspension of dividend payments for the rest of the year
Despite positive signals, there is still considerable uncertainty about how the coronavirus pandemic will develop in the next few months in both Sweden and the rest of the world. To ensure the banks’ resilience in a situation that continues to be uncertain, the banks should suspend the payment of dividends to shareholders in 2020. This was the message from Finansinspektionen’s Director General Erik Thedéen at Fastighetsdagen today.
Capital requirements of Swedish banks as of Q2 2020
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 2020.
Erik Thedéen: How can consumer welfare be improved in financial markets?
FI's Director General Erik Thedéen took part in a panel discussion during the conference "Consumer Behavior in Financial Markets", arranged by the Swedish House of Finance at the Stockholm School of Economics today.
ESRB recommendation on distribution
The COVID-19 pandemic has incurred large human and economic costs and also affected the financial sector. Maintaining own funds in financial institutions is important both for ensuring the resilience of the financial system and supporting banks' lending through this crisis.
