Leverage ratio requirement for Swedish banks

However, the disadvantages of a leverage ratio requirement mean that it should not be introduced at a level that is so high that it takes effect as the main capital restriction instead of the risk-weighted capital adequacy requirement.

FI's policy can be summarised as follows:

• There is insufficient reason to implement a leverage ratio requirement for Swedish banks before the requirement comes into effect within the EU, which is expected to take place in 2018.
• Given the current situation, Sweden should not introduce a requirement for a leverage ratio that is higher than in the rest of the EU.
• Given that the level of the requirement does not exceed three per cent, Sweden should work to ensure that the EU's regulation permits FI and other national competent authorities to require that the leverage ratio requirement is to be primarily covered by common equity Tier 1 capital.
• The leverage ratio requirement should cover all entities covered by the current requirement for reporting and publishing the leverage ratio in the EU's Capital Requirement Regulation. However, an in-depth analysis needs to be conducted of the impact that a requirement would have on those banks that mainly lend to central governments, municipalities and county councils.
• Sweden should work to ensure that there is flexibility in the EU regulation for FI and other national supervisory authorities to allow the leverage ratio requirement to be satisfied at the group level only.