.jpg)
Resilience in the Swedish financial system is satisfactory. Despite unease abroad, the banks have sound resilience and access to funding. The major banks’ need for funding from the market and the substantial debts of households are, at the same time, vulnerabilities that must be monitored and counteracted. These are the conclusions of Finansinspektionen’s (FI’s) Stability Report.
The fact that resilience in the financial system is considered satisfactory is largely linked to the position of the major Swedish banks. The banks have sufficient capital and have access to funding from the market, even in a relatively uncertain international environment. The recent stress test conducted by the European Banking Authority (EBA) also showed that Swedish banks are among those that stand best equipped in Europe to face a deterioration in the economy.
The vulnerabilities in the financial system are largely due to the structure of the Swedish system. Sweden has a large, interlinked financial system with four major banks, all of which must borrow money on the market to fund lending, not least in the form of Swedish mortgages.
The best way of counteracting these vulnerabilities is to impose demands on banks and households to build up their resilience to uncertainty and shocks. Hence, FI has, for example, increased capital and liquidity requirements for the banks in the past few years. In order to strengthen households, FI has introduced a mortgage cap, raised the capital requirements for the banks’ mortgage portfolio and is now working on an amortisation requirement.
Today, FI has a broadened responsibility for financial stability that covers counteracting financial imbalances to stabilise the credit market. Accordingly, FI will introduce measures to prevent the financial system from having a negative impact on the economy, even though the system in itself is not in danger. The new responsibility raises questions about the boundaries between FI and other policy areas, and the memorandum “FI and financial stability” describes how FI works with and views these matters.
FI has also published a decision to leave the countercyclical capital buffer unchanged.
At 10 a.m. today, FI will hold a press conference at its offices, at which Director General Marti
