A stable, well-functioning financial market for allA stable, well-functioning financial market for allFI Analysis
FI’s assignment is to promote financial stability and strong consumer protection. The stability assignment has been expanded to include the prevention of financial imbalances with the aim of stabilising the credit market. It requires a more extensive analysis and FI becomes clearer about the positions that authority takes. FI therefore issues a series of reports entitled FI Analysis. This series presents investigations and analyses of key issues for FI’s area of responsibility. FI Analysis reports are issued several times a year.
2020
FI Analysis 26: Macro-based credit loss model for major Swedish banks
Large credit losses can result in otherwise profitable banks reporting a loss. This FI Analysis describes a methodology for estimating how large credit losses can be in a stressed macroeconomic scenario.
FI Analysis 25: Interest rate deductions and households’ loans
The tax rebate for interest expenses – the interest deduction – means that households borrow more, and can and want to pay more for homes. This means that the households experience an increase in both their liabilities and assets, which in turn could have an impact on the stability of the financial system. In this FI Analysis, we calculate the impact of a change to the interest deduction. The reason for this analysis is the direct link between interest deductions and households’ loans.
FI Analysis 24: Stress test of bank lending to commercial real estate firms
Commercial real estate firms are sensitive to changes in interest rate expenses and income. Following a shock, vulnerable commercial real estate firms could lead to credit losses for the banks.
FI Analysis 23: Can the bond market dampen the credit cycle?
The access of non-financial firms to credit is central for financial stability, particularly during financial crises. In recent years, the market for corporate bonds has grown steadily and currently plays an important role in firms’ financing. This analysis shows that it has not been easier to issue corporate bonds in Swedish krona during financial crises than to take a bank loan. This pattern deviates from previous research on the USA and the euro zone.
FI Analysis 22: Fewer high-cost short-term credits after new rules
After the provisions regarding high-cost short-term credits were changed in 2018 – in part by introducing an interest rate ceiling and cost ceiling – these types of loans decreased sharply. It is probable that the reform has led to a decrease in the supply of high-cost short-term credits. It is also evident that several companies have stopped offering such loans.
FI Analysis 21: New liquidity indicators for the fixed-income market
The Swedish fixed-income market – which consists of the bond market, the money market and interest rate derivatives – is important for the government, municipalities, banks and firms to be able to finance their operations and manage risks. It is therefore of central importance to understand how these markets function and, more specifically, how liquid they are. This FI Analysis presents a new method for measuring market liquidity that focuses on government bonds and covered bonds.
2019
FI Analysis 20: Fewer home equity withdrawals after amortisation requirements
This FI Analysis shows that households’ tendency to use mortgages for purchases other than buying a home decreased following the amortisation requirements.
FI Analysis 19: Young adults and the housing market
This FI Analysis shows that the the increase in house prices is the primary reason it has become more difficult for young adults to buy a home.
FI Analysis 18: Swedish risk premia and monetary policy
A disorderly and abrupt increase in international market rates could lead to significantly higher term and equity risk premia. This is the conclusion of an analysis conducted by FI.
FI-analysis 17: Fewer Vulnerable Households after Stricter Amortisation Requirement
Under FI's stricter amortisation requirement, which went into effect on 1 March 2018, new mortgagors with debt in excess of 450 per cent of gross income must amortise 1 percentage point more of their loan per year in addition to the existing requirement. The objective of the stricter requirement is to strengthen resilience of households by decreasing the number of mortgagors who have high debt in relation to their income.
