Stress test methodology for assessment of the capital planning buffer

In September 2014, Finansinspektionen (FI) published a memorandum entitled Capital Requirements for Swedish Banks (the capital requirements memorandum).

In this memorandum, FI states its position on several of the capital requirement provisions that have been introduced into Swedish law as a result of the implementation of the Capital Requirements Directive . It also describes how the size of a firm's capital planning buffer shall be assessed using a stress test of the firm's capital situation and earning capacity. The stress test shall reflect how the firm is affected by a severe but plausible financial stress.

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. FI currently intends to use this methodology for the ten largest firms.