FI extends the risk weight floor for Swedish mortgage exposures

FI has decided to extend the risk weight floor by two years, from 31 December 2021 to 30 December 2023.

FI makes the assessment that the risks posed by high real estate prices and highly leveraged households – which were the original motivation behind initially introducing the measure – have remained largely the same and the measure is still needed.

The decision applies to the firms that apply the internal ratings-based (IRB) approach to calculating risk-weighted exposure amounts for credit risk and issue mortgages in Sweden.

On 20 September 2021, through Article 458 of the Capital Requirements Regulation, FI informed the European Commission and the European Systemic Risk Board (ESRB) of the authority's intention to extend the current risk-weight floor of 25 per cent for Swedish mortgages. The European Commission approved FI's proposed measure on 12 November 2021.