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.
FI Analysis 21: New liquidity indicators for the fixed-income market
The Swedish fixed-income market – which consists of the bond market, the money market and interest rate derivatives – is important for the government, municipalities, banks and firms to be able to finance their operations and manage risks. It is therefore of central importance to understand how these markets function and, more specifically, how liquid they are. This FI Analysis presents a new method for measuring market liquidity that focuses on government bonds and covered bonds.
SEB receives an administrative fine for deficiencies in its work to combat money laundering in the Baltics
SEB has not sufficiently identified the risk of money laundering in its Baltic operations and has had deficiencies in its governance and control of the Baltic subsidiary banks’ anti-money laundering measures. SEB is therefore being issued a remark and an administrative fine of SEK 1 billion.
SEB receives remark and administrative fine of SEK 1 billion
SEB receives a remark and must pay an administrative fine of SEK 1 billion for deficiencies in its work to prevent money laundering risks.
FI will hold press conference about SEB
Finansinspektionen (FI) will hold a press conference on Thursday, 25 June, following the Board of Directors’ decision regarding the investigation into SEB AB’s governance and control of measures to combat money laundering in the bank’s subsidiaries in the Baltic countries.
JAK Medlemsbank receives a remark and an administrative fine
JAK Medlemsbank (JAK) has been deficient in its work to prevent money laundering and terrorist financing. The bank is therefore being issued a remark and must pay an administrative fine of SEK 1.6 million.
JAK Medlemsbank receives a remark and an administrative fine
Finansinspektionen is issuing JAK Medlemsbank (516401-9969) a remark. JAK Medlemsbank must also pay an administrative fine of SEK 1.6 million.
New log-in method for periodic reporting replaces reporting card
On 18 August 2020, FI will introduce a new log-in method for periodic reporting filed via an application on the computer and that previously required a card and card reader. The new method requires users to log in using Bank ID.
FI Supervision 18: Continuity management at banks
Many banks are working actively with continuity management and have implemented key measures to reduce the risk of serious disruptions. At the same time, FI sees a need for the banks to further strengthen their continuity management. FI expects the banks to continue to focus on enhancing the resilience of their critical functions. This supervision report describes the areas where FI would like to see improvements.
Measures stabilised the financial situation
Governments, central banks, and authorities around the world have taken powerful measures to mitigate the economic impact of the coronavirus pandemic. These measures also helped dampen uncertainty on the financial markets. By utilising available buffers and continuing to lend to firms and households, the financial sector can dampen the impact of the crisis. It is also important to remember that the economic crisis is not over, and uncertainty is therefore high, notes Finansinspektionen (FI) in its first stability report of the year.
Stability in the Financial System (2020:1)
The coronavirus pandemic has resulted in an exceptional stress for the real economy. Governments, central banks and supervisory authorities have implemented significant measures to dampen the crisis. This has helped to reduce the uncertainty on the financial markets. But we are in still in the middle of the crisis, and there is considerable uncertainty going forward.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) decided on 3 June 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 0.48 per cent.
Global sustainability network NGFS publishes status report and guide for supervisors
The global sustainability network NGFS (Network for Greening the Financial System) is publishing today a report on how banks around the world consider climate-related risks in their lending. The report shows that this is occurring more frequently, but it is at the same time difficult to see which loans constitute a lower risk. This is because, for example, there is no international classification and a shared perception of which assets are “green” and “brown”.
Capital requirements of Swedish banks as of Q1 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 Q1 2020.
FI resumes work on supervision investigations
FI decided on 1 April given the acute stage of the coronavirus pandemic to extend the freeze on new supervision investigations until 3 May. This decision will not be extended again, which means that the freeze on ongoing supervision meetings, investigations and information gathering will be lifted starting on 4 May.
The Swedish Bankers’ Association transfers administration of STIBOR to Swedish Financial Benchmark Facility
The Swedish Bankers’ Association has announced that the association is transferring the administration of the Swedish benchmark STIBOR to Swedish Financial Benchmark Facility (SFBF), whereupon the task of adapting STIBOR to the requirements set out in the EU Benchmarks Regulation falls to SFBF. Finansinspektionen will assess the application for authorisation of SFBF as administrator of STIBOR when it is submitted.
FI’s view on the application of the EBA’s new guidelines on moratoria
The European Banking Authority (EBA) published guidelines on 2 April on the criteria that must be fulfilled in order for measures taken to be viewed as general moratoria. FI considers exemptions from amortisation requirements for mortgages and payment reliefs for small and mid-sized firms in accordance with the Swedish National Debt Office’s loan guarantees to be measures that can be viewed as general moratoria under the guidelines.
Banks may now grant amortisation exemption
FI’s Board of Directors has decided that the proposal communicated on 2 April will go into effect as of today. This means that banks will now be able to grant both new and existing mortgagors exemption from the requirement on amortisation. The exemption gives mortgagors greater financial manoeuvrability in these uncertain times during the spread of COVID-19.
Proposed general guidelines for exemption from amortisation requirements on special grounds
The proposal provides mortgage undertakings with the possibility of granting all new and existing mortgagors a temporary exemption from amortisation requirements. The exemption possibility applies during a severe downturn in the Swedish economy. The current situation due to the spread of the corona virus is a clear example of when the exemption may be granted to all mortgagors amortising in accordance with the amortisation regulations.
Banks may grant all mortgagors amortisation exemption
Banks will have the possibility of offering all new and existing mortgagors an exemption from the amortisation requirements due to the spread of the coronavirus and its effects on the Swedish economy. The exemption will be in force until the end of June 2021. This enables Finansinspektionen to provide all mortgagors with greater manoeuvrability in these uncertain times.
The Swedish Mortgage Market (2020)
The percentage of new mortgagors with a high level of debt in relation to either their income or the value of the home continues to be high. New mortgagors in 2019 increased their average loan-to-income ratio. The average loan-to-value ratio also increased in 2019 among new mortgagors, thus breaking the trend of falling loan-to-value ratios since 2013.
Reporting on money laundering postponed
Due to the current situation with the ongoing spread of the coronavirus, Finansinspektionen has postponed the deadline for the annual reporting on money laundering and financing of terrorism. The deadline has been pushed forward from 31 March 2020 to 30 April 2020.
FI expects banks and credit market companies to stop dividend payments
The spread of the coronavirus has created immediate challenges for society and caused economic disruptions throughout Sweden and the global economy. The forecasts for the Swedish economy are rapidly deteriorating. Therefore, it is important the we safeguard a stable supply of credit to households and firms and maintain good resilience in the system. Banks and credit market companies play a crucial role in this respect.
FI delays decision on SEB until June
FI is delaying the decision that will conclude the ongoing sanction assessment in the investigation into the governance and control of anti-money laundering measures at Skandinaviska Enskilda Banken AB (SEB). FI is now planning to pass its decision in June.
EBA’s statement on payment delays linked to COVID-19
The spread of the coronavirus has introduced considerable challenges for society as a whole, and even the financial system. We find ourselves in an exceptional situation, and uncertainty is widespread. These extraordinary circumstances demand appropriate application of existing regulations, including rules for forbearance and assessment of a significant increase in credit risk.
Swedbank receives a warning and an administrative fine of SEK 4 billion
Swedbank AB receives a warning and must pay an administrative fine of SEK 4 billion for serious deficiencies in its work to combat money laundering.
Swedbank fined for serious deficiencies in its measures to combat money laundering
Swedbank AB has had serious deficiencies in its management of the risk of money laundering in its Baltic operations. This is the conclusion of parallel investigations into parent company Swedbank AB and its subsidiary bank Swedbank AS in Estonia that were conducted by Swedish Finansinspektionen (FI) and Estonian Finantsinspektsioon.
FI will hold a press conference related to Swedbank
Finansinspektionen (FI) will hold a press conference on Thursday, 19 March, following the decision by FI’s Board of Directors regarding the investigation into Swedbank’s measures to combat money laundering.
Loss of income due to corona-virus a cause for exemption from amortisation
Due to the spread of the coronavirus disease (COVID-19), many households and firms may be exposed to economic stress. Even if the crisis is expected to be temporary, its effects can be far-reaching. Banks and borrowers may agree to reduce or suspend amortisation payments temporarily given special grounds. FI considers the loss of income linked to COVID-19 to qualify as special grounds.
Decision by FI’s Board of Directors: the countercyclical buffer rate is lowered to zero
During an extraordinary meeting today, Monday, 16 March, FI’s Board of Directors decided to adopt a countercyclical buffer rate of 0 per cent in accordance with the proposal presented on Friday, 13 March 2020.
Measures to improve effectiveness of anti-money laundering supervision
“There are interesting ideas about placing parts of this supervision at the EU level. I believe that joint analytical resources and supervision methods in the long run could lead to more effective supervision, in part due to improved insight into cross-border payment flows”, asserted Erik Thedéen at the international conference Finance Summit 2020 in Paris.
FI on liquidity coverage ratios (LCR) for Swedish banks
Given the current circumstances, FI would like to clarify that it will temporarily allow banks to fall below the liquidity coverage ratio (LCR) for individual currencies and total currencies.
Proposed amendment to regulations due to reduction in countercyclical buffer rate
Finansinspektionen proposes that the buffer rate be lowered by 2.5 percentage points and set at 0 per cent.
FI lowers the countercyclical capital buffer to zero
The spread of the coronavirus disease is sending serious economic shocks throughout the world and in Sweden. There is currently widespread uncertainty about the future course of events and how far-reaching the economic impact will be. The economic disruptions and the greater uncertainty are also affecting the financial system. Finansinspektionen (FI) will therefore lower the countercyclical capital buffer requirement for banks from 2.5 per cent to 0 per cent. This corresponds to a reduction of around SEK 45 billion. The buffer is being lowered pre-emptively to ensure a well-functioning supply of credit, which helps firms and households maintain production, consumption and investments.
FI comments on COVID-19 and the banks
The spread of the coronavirus disease (COVID-19) is having a financial impact on firms and households around the world. There is considerable uncertainty about how much the disease will impact the global economy. This economic uncertainty also affects the financial system.
Erik Thedéen: FinTech and cyber threats – what impact do they have on financial stability?
The rate at which household debt is increasing has slowed the past three years. The two amortisation requirements that FI introduced contributed to this change. But the low interest rates entail risks. The debt of commercial real estate companies has been increasing sharply, and the banks have large exposures to the sector. FI decided today to raise the capital requirements for bank loans for commercial real estate. Erik Thedéen also noted that cyber threats are a challenge facing society as a whole, and cooperation is needed on a broad front.
Capital requirements of Swedish banks as of Q4 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 Q4 2019.
Consumer Protection Report 2020
Finansinspektionen (FI) will prioritise two consumer protection risks for further work in 2020: unaffordable lending and unsuitable advice and distribution of financial products to consumers who were not part of the product’s original intended target market. FI will also assess the adequacy of claims handling for home insurance.
Extra Board Meeting on 19 March at 9:00 AM
The agenda for this meeting includes the investigation into Swedbank AB’s governance and control of anti-money laundering measures in the bank’s subsidiaries in the Baltic countries.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) decided on 29 January not to change the countercyclical buffer rate. The buffer rate of 2.5 per cent, which has applied since 19 September 2019, shall thus continue to apply. The countercyclical buffer guide is set at 0.18 per cent.
Increased capital requirements on bank loans for commercial real estate
Finansinspektionen (FI) considers there to be elevated risks in the banks’ lending for commercial real estate. The banks should hold more capital for these exposures, which is why FI is raising the capital requirements.
Increased transparency on carbon pricing can strengthen the financial system
FI will explore the possibility of advocating both nationally and internationally increased disclosure of firms’ internal carbon pricing.
2019
Clarification on the impact for Swedish banks from revised Basel standards
In relation to the report published by the European Banking Authority (EBA) in August Finansinspektionen would like to make the following clarification on the impact for Swedish banks of the revised Basel standards. According to Finansinspektionen’s calculation, the increase in tier 1 minimum required capital would be about 30 per cent instead of 53 per cent as shown in the report from the EBA (keeping the assumptions and methodology set by EBA, but taking into account the current Swedish mortgage floor for the current risk-weighted assets).
FI opens sanction case in SEB investigation
FI is opening a sanction case in the investigation into Skandinaviska Enskilda Banken AB’s (SEB) governance and control of measures to combat money laundering in the bank’s subsidiaries in the Baltic countries.
FI Analysis 20: Fewer home equity withdrawals after amortisation requirements
This FI Analysis shows that households’ tendency to use mortgages for purchases other than buying a home decreased following the amortisation requirements.
FI Analysis 19: Young adults and the housing market
This FI Analysis shows that the the increase in house prices is the primary reason it has become more difficult for young adults to buy a home.
Planned service disruptions in FI’s reporting systems
From Monday, 2 December, to Tuesday, 10 December, all of FI’s reporting systems will experience service disruptions or closures due to planned maintenance and updates. The extent to which individual systems will be affected will vary.
Stability in the Financial System (2019:2)
The low interest rates are expected to remain low for a longer period of time. It could lead to greater risk-taking among various actors, and increased challenges for insurance undertakings.
Capital requirements of Swedish banks as of Q3 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 Q3 2019.
Erik Thedéen: How we need to work to fight money laundering
“We need to make advancements in the fight against money laundering here and now, within the current system and regulatory framework,” asserted Erik Thedéen at the Swedish Bankers’ Association’s annual Bank Meeting.
FI’s work to combat money laundering and terrorist financing
Finansinspektionen (FI) strengthened its anti-money laundering supervision in 2019, in part by dedicating considerable resources to reviewing major Swedish banks’ governance and control of anti-money laundering measures in Baltic subsidiaries.
FI opens sanction case in Swedbank investigation
FI is opening a sanction case in the investigation into Swedbank AB’s governance and control of measures to combat money laundering in the bank’s subsidiaries in the Baltic countries.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) decided on 24 October not to change the countercyclical buffer rate. The buffer rate of 2.5 per cent, which has applied since 19 September 2019, shall thus continue to apply. The countercyclical buffer guide is set at 0.16 per cent.
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.
Martin Noréus resigns from FI
FI’s Deputy Director General and Executive Director of Banking, Martin Noréus, has resigned from his position at FI to become Chief Compliance Officer at Handelsbanken.
New rules on contingency mechanisms for a dedicated interface
New rules enter into force in the EU on 14 September 2019 on contingency mechanisms for a dedicated interface. Finansinspektionen would therefore like to provide the following information for firms under supervision.
New rules on strong customer authentication
FI is publishing a Q&A on new rules that will go into effect on 14 September.
Erik Thedéen: Climate and sustainability in focus at FI
FI’s Director General spoke today at the Finansdagen conference in Stockholm.
Martin Noréus: Capital and AML - current topics in bank supervision
At a conference today, Deputy Director General Martin Noréus shared his views on capital adequacy in Swedish banks and how capital adequacy will be impacted by forthcoming regulations. Mr. Noréus also gave a process update on ongoing AML investigations and concluded that money-laundering risks will become a bigger consideration in prudential supervision.
Comments to questions about conflict of interest in the supervision of Swedbank
Due to the announcement that Folksam’s CEO Jens Henriksson has been named President and CEO of Swedbank, FI has received questions about whether this gives rise to a conflict of interest since FI’s Director General Erik Thedéen was previously Managing Director of KPA, which Folksam owns together with SKL.
Timeframe for investigations into Swedish banks’ management of money laundering risks in the Baltics
During the month of July, FI sent notification letters to SEB and Swedbank as part of the investigations into the banks’ management and control of money laundering risks in Estonia, Latvia and Lithuania.
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.
Erik Thedéen's introductory speech at IOSCO SFN Stakeholder Meeting
Erik Thedéen made the introductory speech at the first IOSCO SFN Stakeholder Meeting in Stockholm.
Swedish loans for consumption
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.
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.
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.
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.
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.
Capital requirements of Swedish banks as of Q1 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 Q1 2019.
Nordic and Baltic financial supervisors enhance cooperation to fight money laundering
Heads of the Nordic and Baltic financial supervisors met today in Stockholm. They agreed on measures to enhance the cooperation between the authorities with the aim of fighting money laundering and terrorist financing.
FI’s comments following publication in the media of extracts from verification letters
FI sends verification letters at an early stage of its investigation process, and the aim of this letter is to verify the facts of the case. Verification letters may at times also include preliminary assessments, but these assessments assume that the information FI received is correct and has been understood correctly.
Erik Thedéen: Diversity on the mortgage market is healthy
FI’s Director General participated in the seminar Evolution of Mortgage Finance arranged by Stabelo for a broad group of institutional investors.
Consumer Protection Report 2019
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.
FI comments on the recent events involving Swedbank
Over the past few weeks, the media has reported on potentially major problems related to money laundering primarily in Swedbank’s Estonian operations. These reports have caused the bank’s share price to fall and had a negative impact on the bank’s reputation.
The Swedish Mortgage Market (2019)
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.
FI-analysis 17: Fewer Vulnerable Households after Stricter Amortisation Requirement
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.
More households are amortising, but households still have high debt
New mortgagors are amortising, borrowing less and buying less expensive homes, but many still have high debt. These are FI’s conclusions in this year’s mortgage report. FI is also publishing an FI Analysis that shows the stricter amortisation requirement has reduced the percentage of borrowers with high debt in relation to their income.
FI Analysis 16: How do covered bonds function?
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.
Report from Forensic Risk Alliance is part of FI’s investigation
FI has received a copy of Swedbank’s external review that was initiated by reports in the media of suspected money laundering in the Baltics.
FI has received report on suspected money laundering
FI confirms that it received a report from Swedbank on 1 March regarding suspected money laundering.
Erik Thedéen: Swedish perspectives on the Banking Union
Erik Thedéen, Director General of Finansinspektionen, took part in a seminar on “The Banking Union from a Nordic-Baltic perspective” arranged today by SIEPS and the Swedish Government’s “Committee on Potential Participation in the European Banking Union”.
FI strengthens its international supervisory collaboration against money laundering
“We are taking the initiative to strengthen our international supervisory collaboration against money laundering and we are redistributing our own resources to increase our supervision capacity,” says FI’s Director General Erik Thedéen after today’s meeting with Minister for Financial Markets and Housing Per Bolund.
FI’s liquidity coverage ratio requirements in individual currencies and diversification of covered bonds in the liquidity buffer
In this memorandum, Finansinspektionen (FI) develops its view on several specific areas of the EU regulatory framework for liquidity regulation.
FI’s comments regarding customer relationships and confidentiality
SVT’s investigative journalism program Uppdrag Granskning has reported on certain transactions that occurred through Swedbank’s operations in the Baltics.
Capital requirements of Swedish banks as of the fourth quarter 2018
Finansinspektionen publishes the capital requirements of the largest Swedish banks and credit institutions that belong to the supervisory categories 1 and 2 as of the end of the fourth quarter 2018.
FI’s comments on the supervision of anti-money laundering activities in the Baltics
Due to the reports in the media regarding suspected money laundering in Swedbank’s Estonian operations, FI is issuing the following comments.
Joint statement by the Estonian and Swedish Financial Supervisory Authorities
Eesti Finantsinspektioon (the Estonian FSA) and Finansinspektionen (the Swedish FSA) consider the reports regarding suspected money laundering that yesterday were made public yesterday on Swedish television (SVT) to be very serious. It is extremely important that the banks’ senior management and boards of directors view these matters seriously and take all necessary actions to ensure compliance with laws and regulations.
FI’s comments on Uppdrag Granskning’s disclosures regarding suspected money laundering
FI considers the disclosures regarding suspected money laundering presented by SVT’s program Uppdrag Granskning to be very serious. FI’s Director General Erik Thedéen has made the assessment in several interviews in conjunction with the events in Danske Bank that the possibility of Swedish banks being involved in money laundering cannot be ruled out entirely, but that the scope is most likely more narrow than what has been identified in Danske Bank.
FI's comments regarding the supervision of money laundering
We consider the recent disclosures regarding money laundering and other regulatory infringements in Swedish banks to be very serious. It is extremely important for the banks' management teams and boards of directors to take these matters seriously and ensure that the banks are following the laws and regulations.
Request for the release of documents, FI’s decision and the rulings of the Administrative Court of Appeal
FI would like to clarify which decisions FI has made, which decisions were appealed and which rulings the courts announced with regard to a number of investigations into money laundering at Swedish banks.
FI’s View on Preconditions for Mortgage-Based Business Activities
In Sweden, the traditional bank-based financing model for issuing and financing mortgages is currently being supplemented by models where mortgages are being financed in new ways, e.g. alternative investment funds (AIF).
Statement regarding Nordic-Baltic financial crisis simulation, January 2019
The Nordic and Baltic financial stability authorities have conducted a joint financial crisis management exercise. The exercise was held from 22 to 23 January 2019 and involved 31 authorities from Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden as well as relevant European Union authorities. A staff member of the International Monetary Fund observed the simulation.
FI Analysis 15: Do banks still benefit from an expectation of an implicit state guarantee?
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.
The Administrative Court of Appeal rejects Svenska Dagbladet’s appeal
The newspaper Svenska Dagbladet previously appealed FI’s decisions regarding drafts of assessments in investigation matters. The Administrative Court of Appeal of Stockholm announced its ruling in the case today. The Administrative Court of Appeal upholds FI’s decision and thus rejects Svenska Dagbladet’s appeal.
Banks need to prepare for new requirements on the IRB approach
Finansinspektionen (FI) is encouraging institutions that apply the IRB approach to analyse their rating systems to ensure that these systems meet forthcoming new requirements. Under the new requirements, Swedish institutions will need to change their rating methods. Such changes require FI’s approval.
2018
FI Supervision 9: Banks’ work on information and cyber security
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.
FI Analysis 14: Reference rates are changing
Reference rates are important since they are used in many financial contracts, and it is therefore crucial that they are fair, transparent and accurately reflect the underlying market.
Erik Thedéen: Household Debt and the Role of Macroprudential Policy
Thedéen discussed the impact of high household debt on financial stability and sustainable economic growth as well as the role of macroprudential policy at the 7th FIN-FSA conference on EU Regulation and Supervision.
Higher interest rates test resilience
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.
Stability in the Financial System (2018:2)
The economy continues to be strong, both in Sweden and globally, but it is now showing signs of a slow-down. Interest rates have been low for a long period of time, which has led to high risk-taking and rising asset prices. As a result, the risks in the financial system are elevated. The resilience in the Swedish financial system is satisfactory in general but continued high growth in debt fuelled by lending and investments related to residential property and commercial real estate require monitoring.
Capital requirements of Swedish banks as of Q3 2018
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 2018.
Biennial Review of the Systemic Risk Buffer
As outlined in the capital requirements directive, FI must review the systemicrisk buffer on an biennial basis. FI has reviewed the arguments originally setout to support a SRB buffer level of 3 % at consolidated level for the major banking groups and finds the arguments to still hold today for the three remaining major banking groups, following Nordea’s re-domicile.
Work with sustainability is progressing – but there is still much to be done
FI is publishing today three reports on sustainability. The reports show that the work with sustainability is progressing on several fronts and that the industry’s own initiatives, where relevant, are working. But there is still a lot of work left to be done. FI is also publishing a follow-up report for the Government on FI's work with sustainability-related matters in 2018.
FI Supervision 7: Sustainability perspective in lending to corporates – a follow-up review
The banks give greater consideration to sustainability aspects in their lending to corporates. However, FI sees a need for more transparency and comparability in the area of sustainability.
Finansinspektionen’s work in 2018 to contribute to sustainable development
FI has conducted a number of supervision activities related to sustainability at the same time as the organisation has been partly restructured and received additional resources. During the year, FI's work has focused on integrating sustainability-related matters into its ongoing supervision, a project that will continue and be intensified.
Major Swedish banks show resilience in EU stress test
The major Swedish banks are resilient and have the ability to withstand a sharp deterioration in the market, according to the stress test conducted by the European Banking Authority (EBA).
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) decided on 31 October 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 0.41 per cent.
The Network for Greening the Financial System has published its first report
The members of the international Network for Greening the Financial System (NGFS) acknowledge in their first report that climate-related risks are a source of financial risk. The Network therefore clarifies that it is within the mandates of central banks and supervisors to ensure the financial system is resilient to climate-related risks.
Erik Thedéen: Will the banks withstand the next crisis – what role will capital requirements play?
Discussing how the banks will withstand the next crisis is undoubtedly asuitable topic in October 2018, which marks exactly ten years since the mostdifficult phase of the financial crisis.
FI raises the countercyclical buffer rate
FI has decided to raise the buffer rate from 2.0 to 2.5 per cent. The reason for this change is that the systemic risks have increased.
Erik Thedéen: On the Agenda: The Swedish FSA’s mandate and current challenges
The procyclical nature of the financial sector tends to amplify cycles and may turn a severe downturn into a financial crisis. One of FI’s tasks is to mitigate this pro-cyclicality.
Erik Thedéen: Higher countercyclical capital buffer?
A speech given by Erik Thedéen, FI's Director General, at the UBS Annual Nordic Financial Services Conference in Stockholm today.
Authorisation to execute merger plan for Nordea
Finansinspektionen grants Nordea Bank AB authorisationto execute the merger plan prepared with its subsidiary, Nordea Bank Abp, under which Nordea Bank AB is absorbed by NordeaBank Abp.
Capital requirements of Swedish banks as of the second quarter 2018
Finansinspektionen publishes the capital requirements of the largest Swedish banks and credit institutions that belong to the supervisory categories 1 and 2 as of the end of the second quarter 2018.
Changed method for the application of the risk weight floor for Swedish mortgages
FI’s Board of Directors decides to change the method used to apply the current risk weight floor for Swedish mortgages through Pillar 2 by replacing it with a corresponding requirement under Article 458 of the Capital Requirements Regulation. The change will enter into force on 31 December 2018.
FI grants Nordea authorisation to move to Finland
Finansinspektionen (FI) grants Nordea Bank AB authorisation to execute its merger plan and thus move the bank’s head office to Finland.
European Commission’s decision regarding the risk weight floor for Swedish mortgages
The European Commission has decided not to propose to the European Council a rejection of Finansinspektionen’s proposal to change the method for the application of the current risk weight floor for Swedish mortgages. This means that the measure may be implemented in Sweden.
Proposal to change Finansinspektionenʼs Regulations (FFFS 2014:33) regarding the countercyclical buffer rate
Finansinspektionen proposes to raise the countercyclical buffer rate to 2,5 percent. The rate is currently at 2 percent. The change will be effective from the 19 September 2019.
FI open to raising the countercyclical buffer rate in September
The next occasion on which FI will decide on the countercyclical buffer rate is in September. FI's Director General has decided that the preparatory work for the decision shall focus on enabling an increase in the rate to 2.5 per cent if such is deemed necessary. The countercyclical buffer is currently 2.0 per cent.
Preconditions for newcomers to the mortgage market
Sweden’s traditional bank-based model for granting and financing mortgage loans is challenged by new firms with alternative financing models.
Opinions from the ESRB and the EBA regarding changed method for application of the risk weight floor for Swedish mortgages
The ESRB and the EBA have submitted their Opinions to the European Council, the European Commission and Finansinspektionen regarding Finansinspektionen's intention to change its method for the application of the current risk weight floor for Swedish mortgages.
Consequences of Brexit for the Swedish financial market
Brexit will become a reality when the UK leaves the EU on 29 March 2019. This will change conditions for cross-border trade in financial services to and from the UK. FI describes in this report its analysis of a number of significant economic and legal aspects related to Brexit.
Swedish loans for consumption
Most loans for consumption are small and have a high effective interest rate and a short maturity. Households with large loans represent the largest share of new lending, though, and the large loan segment is growing the fastest. Households with high income have the largest loans. Borrowers with mortgages normally have larger consumption loans than borrowers without mortgages. These are some of the results from FI’s mapping of consumption loans, Swedish Consumption Loans 2018.
Stability in the Financial System
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 globally, among Swedish households and on the commercial real estate market. The high level of indebtedness makes the financial sector more sensitive to shocks, and, if necessary, FI will take additional measures to strengthen the resilience.
Risks can build up when the economy is strong
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.
EU notification regarding changed method for the application of the risk weight floor for Swedish mortgages
Finansinspektionen has notified the European Parliament, the EU Council, the European Commission, the ESRB and EBA on the intended measure to change the method for the application of the risk weight floor for Swedish mortgages under Article 458 of the CRR.
Capital requirements of Swedish banks as of the first quarter 2018
Finansinspektionen publishes the capital requirements of the largest Swedish banks and credit institutions that belong to the supervisory categories 1 and 2 as of the end of the first quarter 2018.
Major upcoming changes to banks’ credit risk modelling
The regulatory and supervisory frameworks for banks’ internal rating based (IRB) approaches will be significantly adjusted over the coming years. The overall objective is to increase the robustness of capital requirements and ensure consistency across banks. Well-functioning IRB models are key to the capital assessment of the larger Swedish banks and hence a supervisory priority for FI.
FI Supervision 3: Survey of Market Risks in Savings Banks
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.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) decided on 26 April not to change the countercyclical buffer rate. The buffer rate of two per cent, which has applied since 19 March 2017, shall thus continue to apply. The countercyclical buffer guide is set at 0 per cent.
FI Supervision 2: Audit supervision of public-interest entities
Pursuant to the Supervision of Public-Interest Entities (Audit) Act (2016:429), FI is responsible for conducting certain audit supervision activities. FI has conducted an investigation into this supervisory area in 2017. This report provides an overview of the investigation’s results and describes FI’s view on how the regulations can be applied.
FI Supervision 1: Experiences from money laundering supervision 2016–2017
It is FI’s assessment that firms in general have a greater awareness of the regulations than in previous investigations and are committing more resources to their work to prevent money laundering. But more needs to be done.
Households continue to take on large mortgages
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.
FI-analysis 12: The mortgage cap reduced household debt
This FI Analysis presents an assessment of the Swedish mortgage cap. The analysis indicates that the mortgage cap has changed household behaviour. Households with new mortgages borrow less than what they would have done if FI had not implemented the mortgage cap. They are also buying less expensive homes.
The Swedish Mortgage Market
Finansinspektionen (FI) follows the development of household debt on an ongoing basis. The mortgage survey serves as an important source of data for this work. High debt can mean risks for individual households, banks, financial stability and the macroeconomic devel-opment.
Proposal to change method for the application of the risk weight floor for Swedish mortgages
Finansinspektionen (FI) is proposing to change the method it currently uses to apply the current risk weight floor for Swedish mortgages through Pillar 2 by replacing it with a requirement within the framework of Article 458 of CRR. The change is proposed to enter into force on 31 December 2018.
FI updates information about periodic reporting required by the Anti-Money Laundering Act
FI has updated the instructions and FAQs about the periodic reporting firms under Finansinspektionen’s supervision are required to file according to the Anti-Money Laundering Act.
Capital requirements of Swedish banks as of the fourth quarter 2017
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the fourth quarter 2017.
Videos about anti-money laundering now in English
FI has translated into English its educational videos about efforts to combat money laundering and terrorist financing.
Martin Noréus: Current challenges facing the banking sector
“The Swedish banking sector is profitable and has satisfactory resilience, but it is clearly undergoing a major transformation,” said Martin Noréus in a speech at SvD Bank Summit in Stockholm.
New Nordic-Baltic Memorandum of Understanding
The Swedish Ministry of Finance, the Riksbank, Finansinspektionen (the Swedish Financial Supervisory Authority) and the Swedish National Debt Office in its role as resolution authority, have produced, together with their equivalents in Denmark, Estonia, Finland, Iceland, Latvia, Lithuania and Norway a new Memorandum of Understanding on cooperation and coordination on cross-border financial stability.
Erik Thedéen: Rules prevent crises
Finansinspektionen is responsible for macroprudential policy in Sweden, which includes both promoting financial stability and counteracting financial imbalances. We are also tasked with promoting a high level of consumer protection on the financial markets. One of the reasons that we have been given the responsibility for macroprudential policy is that financial crises have proven themselves to be very expensive.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) decided on 29 January not to change the countercyclical buffer rate. The buffer rate of two per cent, which has applied since 19 March 2017, shall thus continue to apply. The countercyclical buffer guide is set at 0 per cent.
First meeting of the Network for Greening the Financial System
The international Network for Greening the Financial System (NGFS) held its inaugural meeting in Paris last week.
Financial stability and macroprudential policy
Finansinspektionens Director General Erik Thedéens speech in the Standing Committee on Finance the 23 januari 2018.
2017
FI recognises the risk weight floor for Finnish mortgage exposures
Finansinspektionen has passed a decision to recognise the Finnish supervisory authority’s decision to implement an average, firm-specific risk weight floor of 15 per cent for Finnish mortgage exposures.
More efficient handling of applications to use the IRB approach for credit risk
Finansinspektionen (FI) is changing its procedure for handling of applications for permission to use the IRB approach for credit risk.
FI establishes an innovation centre
FI is establishing a fintech innovation centre that will provide information to and maintain a dialogue with companies conducting innovation-based business. This centre and additional initiatives are presented in FI's report to the Government regarding an assignment.
Stability in the Financial System (2017:2)
The Swedish economy continues to be strong and interest rates are extremely low, which contributes to high asset prices and low risk premiums. As global interest rates rise in the future, there is a risk for an abrupt increase in risk premiums and a fall in asset prices, which could be stressful for the financial system.
Capital requirements of Swedish banks as of the third quarter 2017
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the third quarter 2017.
Proposal for a stricter amortisation requirement for households with high loan-to-income ratios
FI is proposing changes to Finansinspektionen’s regulations (FFFS 2016:16) regarding amortisation of loans collateralised by residential property. The regulations cover mortgages granted by credit institutions, i.e. banks and credit market companies.
Erik Thedéen: Incentives vs. risk
“The fundamental problem is the potential conflict that inherently arises from the interplay between economic incentives and excessive risk-taking”, said Erik Thedéen in a speech on Thursday at the School of Business, Economics and Law at the University of Gothenburg. Erik Thedéen analysed the causes underlying this problem and presented some of the measures introduced to mitigate it.
Decision regarding the countercyclical buffer rate
FI decided on 25 October not to change the countercyclical buffer rate. The buffer rate of two per cent, which has applied since 19 March 2017, shall thus continue to apply.
Information about forthcoming periodic reporting in accordance with Finansinspektionen’s regulations FFFS 2017:11
On 1 August, the new Money Laundering Act entered into force as well as FI’s new regulations. According to these new regulations, firms under FI’s supervision must report data that enables FI to assess the risk that firms will be used for money laundering and the financing of terrorism.
Commercial real estate and financial stability
FI:s director general Erik Thedéens speech about commercial real estate and financial stability held at the conference DI Bank in Stockholm 10 maj 2017.
Comments on Nordea's decision to move its head office
Nordea passed a decision today to move its head office to Helsinki. The bank represents a large part of the Swedish financial market, but it is too early to say how the decision will impact Finansinspektionen’s supervision.
Banking capital in times of stress
Erik Thedéen, FI's Director General, speech at the UBS conference: 20th Annual Nordic Financial Services Conference in Stockholm.
Capital requirements of Swedish banks as of the second quarter 2017
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the second quarter 2017.
FI’s Pillar 2 capital assessment method for systemic risk associated with securitisation
Finansinspektionen considers it to be necessary to implement a back-stop within Pillar 2 to limit effects on the total credit supply from systemically critical securitisation. FI is publishing today a method that it intends to use during its capital requirements assessment.
FI:s response to the EU Consultation on FinTech: A more competitive and innovative European Financial Sector
Finansinspektionen has responded to the Commission Consultation Document on FinTech: A more competitive and innovative European Financial Sector.
FI’s view on financial stability and the risks for financial imbalances
Erik Thedéen visited the Committee on Finance today for a Q&A session. He discussed the unprecedented economic conditions that Sweden is currently experiencing.
Capital requirements of Swedish banks as of the first quarter 2017
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the first quarter 2017.
Swedish banking requirements for financial stability should be safeguarded
The design of the Swedish regulations for capital adequacy and crisis management is appropriate for reducing the risk of financial crises and ensuring effective management if a crisis were still to occur. This is the conclusion reached by Finansinspektionen (FI) and the Swedish National Debt Office in a joint report. The report emphasises that Sweden should safeguard national discretions in the framework of banking requirements in ongoing EU negotiations.
Decision regarding the countercyclical buffer rate
FI decided on 27 April not to change the countercyclical buffer rate. The buffer rate of two per cent, which has applied since 19 March 2017, shall thus continue to apply.
Updated categorisation of Swedish credit institutions
FI has updated its supervision categorisation of Swedish credit institutions for 2017. Two credit institutions have changed category.
Erik Thedéen speaks to EU Parliament about new banking rules
Erik Thedéen is commenting today on the EU Commission’s proposed changes to banking regulations during a Q&A session in Brussels in EU Parliament’s Committee on Economic and Monetary Affairs (ECON).
Supervision of the banks
This year’s supervision report describes, at an overarching level, the Swedish banking system, how FI works with supervision and a number of topical risk areas currently in focus.
FI Analysis 10: Amortisation requirement reduced household debt
This FI Analysis shows that the amortisation requirement has helped households with new mortgages change their behavior. New mortgagors are taking smaller mortgages than what they would have done if FI had not implemented the amortisation requirement. These households are also buying less expensive homes.
The Swedish Mortgage Market (2017)
Household debt is a crucial matter which FI monitors closely, and the mortgage survey is an important part of this work. Household debt has increased sharply in recent years. During the same period, mortgage rates have fallen and are now at historically low levels, and house prices have also risen rapidly. Finansinspektionen (FI) judges there to be an elevated risk that house prices will fall compared to a normal state, and it is more likely that interest rates will rise than that they will fall.
Decision regarding the countercyclical buffer rate
FI decided on 29 March 2017 not to change the countercyclical buffer rate. The buffer rate of two per cent, which has applied since 19 March 2017, shall thus continue to apply. The countercyclical buffer guide is set at 0 per cent.
FI Analysis 9: Households’ interest rate adjustment periods – an economic vulnerability?
SUMMARY: In Sweden, both the percentage of mortgages that have a variable interest rate and household debts have risen sharply. This combination has made house-holds sensitive to rising interest rates.
Capital requirements of Swedish banks as of the fourth quarter 2016
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the fourth quarter 2016.
FI’s view on automated investment advice
It is likely that automated services will play a greater role on the financial market. Finansinspektionen (FI) views an online market with simplified investment advice as a step in the right direction in terms of achieving an independent market for investment advice that reaches a wide number of consumers.
2016
FI’s capital assessment method for securitisation within Pillar 2
In this memorandum, FI describes its view of securitisation and the risks (primarily flowback) that FI sees and that are not taken into consideration in the banks’ current capital requirements.
Decision regarding reciprocation of macroprudential measures in two EU countries
FI has published decisions regarding reciprocation of macroprudential measures in Estonia and Belgium.
Biennial Review of the Systemic Risk Buffer
As outlined in the capital requirements directive, FI must review the systemic risk buffer on an biennial basis. FI has reviewed the arguments originally set out to support a SRB buffer level of 3% at consolidated level for the four major banking groups and finds the arguments to still hold today.
Calibration of stress test for the capital planning buffer
Finansinspektionen’s stress test method to determine the capital planning buffers for the major banks, credit market companies and securities companies is divided into general overarching methodologies and a specific calibration of risk parameters. The specific calibration of risk parameters can be changed by FI on a year-by-year basis.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
Capital requirements of Swedish banks as of the third quarter 2016
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the third quarter 2016.
FI Analysis 7: Leverage ratio as a minimum requirement reduces banks’ buffers
A leverage ratio requirement could contribute positively to financial stability during normal conditions in that it increases the robustness of banks' capital adequacy.
How can the financial sector contribute to sustainable development?
Finansinspektionen is publishing today two reports on sustainability. Together, they serve as the report to the Government that FI was tasked with earlier in the year on the continued work with sustainability issues, how these issues are linked to financial regulation and supervision and how supervision can contribute to sustainable development in a constructive manner.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
Resurs Bank receives a remark and an administrative fine
Finansinspektionen is issuing Resurs Bank AB a remark. The bank must also pay an administrative fine of SEK 35 million.
Capital requirements of Swedish banks as of the second quarter 2016
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the second quarter 2016.
FI decides on stress test methodology for determining the capital planning buffer
FI has now decided on the stress test methodology that will be used for determining the capital planning buffer for the largest Swedish bank companies. The methodology, which is described in more detail it in a new memorandum, is based on the proposal that FI published on the 9 May.
Swedish banks show resilience in European stress test
The major Swedish banks have resilience against a sharp deterioration of the economic environment. This is the result of an EU-wide stress test performed by the European Banking Authority (EBA).
FI aims for unchanged countercyclical buffer rate in September
The next occasion on which Finansinspektionen (FI) will decide on the countercyclical buffer rate is in September. FI’s Board of Directors has decided that the preparatory work ahead of the next decision shall focus on maintaining the rate at its current level, which is currently 2 per cent.
FI analysis 5: Macroeconomic effects of dept-to-income limits
House prices have been rising and, as a result, so has the debt of households in relation to their income – i.e. their debt-to-income (DTI) ratios. A DTI limit could slow this trend, but limiting households' opportunities to borrow would also slow consumption and economic activity.
FI reiterates its statement from the June 22 on Nordea
FI hereby clarifies that its public statement made on June 22, regarding the internal analysis which was unintendedly published in the media last week, is still valid:
FI monitors developments as they unfold
Finansinspektionen is monitoring the developments following the EU referendum in the UK. We are continuing to maintain a dialogue with the Ministry of Finance, the Riksbank and the Swedish National Debt Office and keep close contact with the Swedish banks. FI always has contingency plans in place to take measures that will contribute to financial stability.
FI agrees with EBA Opinion on accounts and bank services for asylum seekers
The European Banking Authority (EBA) published its Opinion of the European Banking Authority on the application of customer due diligence measures to customers who are asylum seekers from higher-risk third countries or territories. Finansinspektionen provides its response to the opinion below.
FI’s response to proposed new requirement for banks to ensure effective crisis managment
The newly implemented Resolution Act introduces new rules and requirements, including requirements about loss absorbing liabilities. In its response to the Debt Office’s proposal, FI says it is important that such new rules and requirements are consistent with Finansinspektionen’s (FI) supervision and the currently applicable capital requirements.
Capital requirements of Swedish banks as of the first quarter 2016
Note: Capital requirements of the Swedish banks, first quarter 1 2016 has been revised. The outcome of the 2015 SREP for Skandiabanken is now accounted for in this memorandum. No other changes have been done."
New methods for banks' risk weights and capital requirements decided
FI has formally adopted the supervisory methods which will be used in the supervision of the banks' internal models for corporate exposures. The banks should now assume that at least every fifth year is a downturn year in probability of default calculations.
Authorisation for Nordea to execute its merger plans
Nordea Bank AB has applied for authorisation to execute three merger plans. The mergers refer to the absorption of three wholly-owned subsidiaries that conduct banking and securities business respectively in Denmark, Finland and Norway.
Stress test methodology for assessment of the capital planning buffer
In this memorandum, FI accounts for the stress test methodology that it intends to use to assess the size of the capital planning buffer for the largest firms.
Consultation response regarding Review of the Riksbank's Monetary Policy 2010-2015
FI as submitted its consultation response regarding Review of the Riksbank's Monetary Policy 2010–2015 (2015/16:RFR6) conducted by Marvin Goodfriend and Mervyn King on commission from the Committee on Finance. The consultation response assesses the reviewers' recommendations regarding financial stability and the interplay between monetary policy and financial stability.
The Swedish Mortgage Market (2016)
The average debt-to-income ratio for households with new mortgages increased from 387 per cent to 406 per cent between 2014 and 2015, according to FI:s report.
FI aims for unchanged countercyclical buffer rate in June
The next occasion on which Finansinspektionen (FI) will decide on the countercyclical buffer rate is in June. FI's Board of Directors decided on 18 April 2016 that the preparatory work ahead of the next decision shall focus on maintaining the rate at its current level, two per cent.
Nordea applies for permission to merge its Nordic subsidiary banks
Nordea Bank AB (Nordea) has filed an application with Finansinspektionen to merge its wholly owned subsidiaries of Nordea Bank Norge ASA, Nordea Bank Finland Plc and Nordea Bank Denmark A / S with Nordea.
Pillar 2 capital requirements for maturity assumptions
FI intends to introduce a maturity floor of 2.5 years under Pillar 2 for banks authorised to use the advanced IRB approach for exposures to corporates.
FI's supervision of banks' calculations of risk weights for exposures to corporates
FI is implementing a new assessment method to evaluate the banks' calculations of risk weights both in general and for exposures to corporates.
FI proposes new framework for macroprudential measures
FI shall be entitled to propose measures, the Government shall approve the measures and the Swedish Parliamentary Committee on Finance shall evaluate FI's work. FI Director General Erik Thedéen is presenting this framework in a speech today.
Capital requirements of Swedish banks as of the fourth quarter 2015
Finansinspektionen publishes the capital requirements of the ten largest Swedish banks and credit institutions as of the end of the fourth quarter 2015.
FI proposes partial waiver for covered bonds
Finansinspektionen proposes partial waiver from the requirements in Article 129 (1)(c) of the Capital Requirements Regulation (CRR) through a change in FI´s regulation (FFFS 2014:12) regarding prudential requirements and capital buffers.
FI open to raising the countercyclical buffer rate in March
The next occasion on which FI will decide on the countercyclical buffer rate is in March. FI's Board of Directors decided on 18 January 2016 that the preparatory work for the decision shall focus on enabling an increase in the rate if such is deemed necessary. The rate is currently at 1.5 per cent.
EBA's MDA Opinion does not change Pillar 2 in Sweden
In response to the Opinion published by the European Banking Authority (EBA) on 18 December 2015 regarding restrictions on distributions linked to the combined buffer requirement (Opinion of the European Banking Authority on the interaction of Pillar 1, Pillar 2 and combined buffer requirements and restrictions on distributions), Finansinspektionen would like to comment as follows.
2015
Environmental and sustainability perspectives in credit granting to companies
Finansinspektionen (FI) has been commissioned by the Government to report on the bank's internal rules regarding credit granting to companies from the perspective of the environment and sustainability. If necessary, FI shall present proposals for measures that can be included in the banks' credit granting process to promote such a perspective.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
FI Analysis 3: Liquidity in the market for covered bonds
The market for covered bonds is important for bank funding and therefore financial stability. The requirements for banks to hold more capital and liquidity for their operations have been tightened since the financial crisis. These requirements affect the banks' costs of holding securities in the trading book and so their costs of acting as market makers.
FI increases transparency in capital requirement for Swedish banks
FI today disclosed for the first time the actual capital requirements for the ten largest Swedish banks and credit institutions at the end of the third quarter of 2015. This is to increase clarity with regard to the effects of FI's capital requirements, including Pillar 2.
Measures against risks from household indebtedness
Summary of the speech by Finansinspektionen's Director General Erik Thedéen at the Centre for Business and Policy Studies' seminar on the economic situation on 19 November 2015.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
Capital needs of Swedish banks as of the second quarter 2015
Finansinspektionen publishes the capital needs of the ten largest Swedish banks and credit institutions as of the end of the second quarter 2015.
Recognition of other Member States' countercyclical buffer rates
Finansinspektionen decides to recognize countercyclical buffer rates up to 2.5 per cent that are set by the designated authority of another EEA country. The firms concerned shall use these buffer rates to calculate their firm specific countercyclical capital buffers.
The future structure of banks' capital requirements
At the Financial Stability Council meeting of 15 June, Finansinspektionen presented its views on the future structure of banks' capital requirements.
Driving forces behind household indebtedness
In this report, Finansinspektionen, Sveriges Riksbank and the Swedish National Debt Office present a general description of the driving forces behind the rise in household indebtedness. A central conclusion in the report is that indebtedness is largely linked to developments on the housing market.
Swedish banks' systemic importance (O-SII)
FI intends to comply with the European Banking Authority's (EBA) guidelines on criteria to assess other systemically important institutions (O-SIIs).
Capital needs of Swedish banks as of the first quarter 2015
Finansinspektionen publishes the capital needs of the ten largest Swedish banks and credit institutions as of the end of the first quarter 2015.
Handelsbanken receives a remark and is ordered to pay an administrative fine
Handelsbanken has not complied with the money laundering rules. The bank has not conducted risk assessments for all of its customers or obtained sufficient information about customers and their business relations. The bank's system for reviewing transactions has also been deficient.
Nordea receives a warning and is ordered to pay the maximum administrative fine
There have been major deficiencies in Nordea's work to prevent money laundering. This means there is a high probability that if people have tried to launder money or finance terrorism that they could have done so without Nordea having been able to detect this.
FI publishes methods for assessing capital requirements for three important risk types
Finansinspektionen (FI) establishes methods for assessing Pillar 2 capital requirements for three types of risk: credit-related concentration risk, interest rate risk in the banking book and pension risk.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
Capital needs of Swedish banks as of the fourth quarter 2014
Finansinspektionen publishes today the capital needs of the ten largest Swedish banks and credit institutions as of the end of the fourth quarter 2014.
2014
FI intends to implement a partial waiver for covered bonds
The European Banking Authority (EBA) has published its opinion regarding the Danish FSA's proposal of a partial waiver from the application of Article 129 (1)(c) of the Capital Requirements Regulation (CRR). Finansinspektionen will also implement the partial waiver within its jurisdicition.
FI's methods for assessing individual types of risk within Pillar 2
This memorandum describes FI's methods for assessing the capital adequacy requirement within the framework of Pillar 2 for three different types of risk.
Decision regarding the countercyclical buffer rate
Finansinspektionen (FI) shall, in accordance with the Capital Buffers Act (2014:966), set a countercyclical buffer guide and a countercyclical buffer rate for each quarter.
Leverage ratio requirement for Swedish banks
Finansinspektionen (Swedish Financial Supervisory Authority – FI) considers that a leverage ratio requirement may serve an important function for establishing financial stability in Sweden as a back-stop, which sets a floor for how low the capital adequacy requirement can fall in relation to the banks' gross assets.
Swedish banks pass the European stress test
FI has tested the resilience of the major Swedish banks to a sharp deterioration in the economy. The study is part of the extensive stress test of 123 European banks coordinated by EBA.
Capital requirements for Swedish banks
Finansinspektionen presents positions to ensure that the Swedish banking system stands more robustly equipped to withstand future financial crises.
Skandiabanken: adverse remark issued and administrative fine of SEK 10 million imposed
There have been inadequacies in the investment advice that Skandiabanken Aktiebolag has provided through tied agents. The bank has not complied with the rules applicable for receiving commission nor dealt with conflicts of interest in the correct manner.
Authorisation for a bank merger in Skåne
Finansinspektionen has decided to approve the reorganisation of Sparbanken 1826.
Capital requirements for Swedish banks
On 3 April, the Government presented a bill regarding strengthened capital adequacy rules.
Supervision of the financial infrastructure works well
Finansinspektionen's and The Riksbank's joint internal audit has assessed the supervision and oversight of the financial infrastructures in Sweden on the basis of the "Principles for financial market infrastructures” (PFMIs) which Finansinspektionen use in its supervision and The Riksbank in its oversight.
FI withdraws the authorisation of Exchange Finans
Finansinspektionen withdraws the authorisation to conduct financing business of Exchange Finans Europe.
2013
Bank interest rates and lending, Q3 2013 (Summary)
In this report, Finansinspektionen (FI) describes the banks' adaptations to higher capital requirements and the effects on households and non-financial firms.
Risks in the financial system 2013
Swedish banks are relatively strong, but they continue to be vulnerable to disruptions on the financial markets, and the development within the Euro zone continues to represent a risk to the Swedish financial system.
Supervision Report 2013
Many of the development trends in today’s financial markets raise important issues for FI. For consumers, greater mobility and increasingly complex financial products represent not only more opportunities but also higher risks. FI needs to bring attention to these risks and resolve them.
Decision to implement a risk weight floor for mortgages
FI is implementing a risk weight floor of 15 per cent for Swedish mortgages. The floor will be implemented as a supervisory measure within Pillar 2.
The Swedish Mortgage Market
This report is based on Finansinspektionen's (FI's) third large mortgage survey. The survey is based on comprehensive material from the eight largest banks in Sweden.
Implementation of the European supervisory authorities’ guidelines and recommendations
Finansinspektionen finds that guidelines from the European supervisory authorities addressed to competent authorities or financial market participants are equivalent to Swedish general guidelines.
2012
Bank interest rates and lending, Q4 2012 (summary)
Both the banks' funding cost and lending rates to households and corporations fell sharply during the fourth quarter of 2012 while the banks' margins on new mortgages increased slightly. Lending to Swedish corporations and households increased during the fourth quarter, but at a slower rate than before. During 2013 Finansinspektionen (FI) will investigate potential measures for how credit institutions can increase the awareness of their customers for how the actual lending rates for mortgages are determined.
Bank interest rates and lending, Q3 2012
Swedish banks have already largely adapted to the forthcoming requirements regarding capital adequacy and access to liquidity. The stricter requirements involve a cost, but also help improve stability in the financial system. On the whole, the forthcoming requirements will generate positive effects for the national economy.
Risks in the financial system 2012
Finansinspektionen’s (FI’s) 2012 risk report 2012 continues to focus on unease on financial markets, where the greatest risk to the Swedish financial system is still a deepened sovereign debt crisis in Europe. Because of low market rates, life insurance undertakings are under pressure, and FI now sees a risk of consumers ending up in a squeeze as the firms review their commitments. This year too, FI views the financial advice market with concern. In this market, consumers are being invited to invest in complex products while advisors receive commissions.
Bank interest rates and lending, Q2 2012
The growth rate of lending to households and corporations is decreasing, but remains positive and is clearly higher than the corresponding figure for the eurozone. Banks' margins on mortgages increased in the same period, according to the second quarterly report.
Supervision Report 2012
The issues presented in this year’s Supervision Report stem from the work on financial consumer protection, financial stability and the requirements on company owners and management. In addition, the report discusses the increased international work, primarily within the EU.
Market risks management
During 2011, Finansinspektionen (FI) investigated how 11 financial companies market risks management. ‘Market risk’ refers to the risk of loss-incurring value changes in assets and liabilities due to fluctuations in interest rates, foreign exchange rates, stock prices and commodity prices.
Bank interest rates and lending, Q1 2012
In order to strengthen financial stability and avoid future financial crises, new regulations for the banking sector are being prepared. The regulations include higher capital adequacy requirements.
The Swedish Mortgage Market
Loan-to-value ratios decreased for the first time in 10 years and the share of households with new loans over 85 percent has fallen by fifty per cent since 2009. These are some of the findings in Finansinspektionen’s follow-up of the mortgage cap.
2011
Risks in the financial system 2011
Sweden has remained relatively stable in a turbulent period but during this time the risk level in the Swedish financial system has also risen. The uncertainty in surrounding markets has meant that banks’ liquidity risks and the impact of low interest rates on life insurance undertakings remain in focus. Finansinspektionen also believes there is a risk that the sale of complex products to consumers will increase.
Bonuses: Are companies following the rules?
Finansinspektionen (FI) received an assignment from the Government to report on the implementation of the EU Recommendation on remuneration in the financial services sector, the measures taken to ensure compliance with the new rules and how affected companies have adapted to the recommendations.
Supervision Report 2011
Finansinspektionen's annual Supervision Report discusses areas in which fundamental issues with regard to supervision and regulatory development have risen to the forefront and in turn have resulted in new lessons and conclusions.
2010
Risks in the financial system 2010
Finansinspektionen believes the risk level in the Swedish financial sector is lower than last year. Both Sweden’s economy and the situation on the financial market have improved. However, the uncertainty present in foreign markets represents a potential threat to Sweden’s development.
Lessons learned from supervision and regulatory development
FI's annual Supervision Report describes the lessons learned from the financial crisis as well as more general issues regarding consumer protection.
2009
Unwarranted concern for account fraud
The concern for being victimised by account fraud is greatly unwarranted, according to FI’s survey of 2,898 private persons. The survey, conducted during 2008, found that an estimated 1 per cent of the adult population was defrauded that year. The majority, 84 per cent, of those with claims were fully or partially refunded. The expectations of being refunded were considerably lower, however.
Risks in the financial system 2009
Finansinspektionen is charged with ensuring that the financial system isstable and efficient and that consumer protection is adequate. We carry outthese assignments by conducting supervision of financial companies, whichincludes business intelligence, the granting of licences, preparation of egulations,operational supervision with controls of how companies act andpotential interventions.
The households’ financial capability
The majority of the Swedish households have a strong personal financial position and save for the long-term. Most of them have access to a bank account and payment services and three out of four pay by the Internet. This is according to the responses of 1,309 households regarding personal finances. The survey was conducted for FI by Svenskt Kvalitetsindex during the first quarter of 2009.
The banks’ lending for commercial real estate in Sweden
Based on input reported statistical material, we find that the current financial crisis has yet to make any obvious impression in the form of insolvency and credit losses in lending for commercial real estate.
The banks’ financial advice and the law
The overall conclusion is that there is a good census of opinion between bank customers and advisors about how the advisory service should work. Both advisors and customers feel that the advice lives up to the legal requirements.
Development on the mortgage market
Finansinspektionen (FI) has surveyed the development in the banks’ lending for single-family houses and tenant-owner’s flats. At the end of 2008, Swedish households had approximately SEK 1,800 billion in mortgage loans. The investigated banks’ lending constitutes just under 90 per cent of this.
Reclassification of financial assets
Five out of eight banks investigated utilised new opportunities to assess certain financial assets at amortised cost instead of fair value in connection with the interim reports for Q3 2008.
2008
IT disruptions at a constant, high level
IT disruptions are increasing at some companies and decreasing at others. On the whole, the number of disruptions remains at a constant, high level.
The Swedish banks can manage the recession (2008:18)
The four Swedish big banks have managed relatively well so far in the international bank crisis. Financing risks has been the greatest threat to Swedish banks during the autumn's turbulence. Thanks to measures by the Riksbank (Swedish central bank) and the Swedish National Debt Office, these risks have been managed to a great extent until the financing markets begin to function normally again.
Not everyone can pay
Not everyone has access to payment services such as giro services or internet banking. It is mainly people with a record of non-payment and those without Swedish civic registration or coordination numbers who lack access to such services. Those who are denied payment services are forced to pay their bills through the banks’ counter service which incurs high costs and is time inefficient.
The responsibility for the payment system
That the payment system functions and can withstand both internal andexternal incidents such as fire, flooding, power failures, etc. is of greatimportance to the national economy.
Market turmoil and the Swedish banks
The Swedish banks have managed relatively well in the international turbulence prevailing on the financial markets. The four major banks made record profits in 2007 and they all have good financial strength. There are, however, risks in the near future as well as in the long-term. Although these risks are relatively serious, no individual risk is considered to pose a threat to the stability. FI continues to closely monitor the development.
The development on the mortgage loan market
The banks’ risk exposures to the Swedish mortgage loan market have increased due to higher mortgage levels and long amortisation periods. The mortgage lending to Swedish households constitutes the largest exposure in the majority of the banks.
