Martin Noréus: Amortisation requrement and risk weights - two current issues for macroprudential policy

Martin Noréus took up three points:

• It is positive that there is now political unity on giving Finansinspektionen the scope to introduce an amortisation requirement.
• Finansinspektionen prefers the risk-based capital adequacy regulations over non-risk based requirements, such as a binding leverage ratio requirement. This stance assumes that Finansinspektionen can use regulation and supervision to limit the disadvantages of using the banks' internal models. Examples of such disadvantages are that the models may be wrong and that the banks have strong incentives to push down risk weights.
• The risk weights on the banks' corporate exposures in particular have declined more than is justified by the actual risk level. Finansinspektionen is investigating different ways of remedying this. We will require the banks to amend their models. It is possible that we will also introduce measures within the scope of Pillar 2, that is, further capital surcharges in addition to those indicated by the models.