A stable, well-functioning financial market for allA stable, well-functioning financial market for allFI is publishing banks’ effective capital headroom
Starting today, FI will now publish banks’ effective CET 1 capital headroom every quarter. This will show how much of the banks’ buffer is available to cover losses before a bank breaches a regulatory requirement or its Pillar 2 guidance. By publishing this information, FI will make it easier for market participants and other stakeholders to interpret the banks’ capital headroom.
In today's publication of Capital requirements for Swedish banks, Q4 2024, FI is also publishing what we are calling the banks' effective CET 1 capital headroom.
The effective CET 1 capital headroom shows how much of a bank's own buffer of CET 1 capital – in relation to the risk-weighted capital requirement and the Pillar 2 guidance – is available to cover losses without the bank breaching its regulatory requirements or the Pillar 2 guidance.
A bank's effective CET 1 capital headroom is defined as the amount in SEK – recalculated to a per cent of the risk exposure amount (REA) – for which the headroom between the bank's available capital and eligible liabilities and its regulatory requirement and Pillar 2 guidance is smallest.
This report, like previous publications of Capital requirements for Swedish banks, covers the three major banks, Handelsbanken, SEB and Swedbank, as well as Länsförsäkringar, Klarna, Kommuninvest, Svenskt Exportkredit (SEK), SBAB, Avanza and Nordnet. We describe the method and other information that serve as a basis for the calculations in the memorandum Effective CET 1 capital headroom for banks.
