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The forthcoming capital requirements for Swedish banks have now been decided. The requirements were presented as early as before the summer. The decision also refers to the countercyclical capital buffer, which shall be 1 per cent.
Before the summer, Finansinspektionen (FI) presented which capital requirements are to apply for the Swedish banks. The new capital requirements entail, in brief, that the banks shall have more capital than the minimum level required according to the EU’s common regulatory framework, and this applies in particular to the four major Swedish banks.
They shall, amongst other factors, have common equity Tier 1 capital of 5 per cent for systemic risks, and allocate more capital for their mortgage operations when the so-called risk weight floor is increased to 25 per cent. A risk weight floor is also being introduced for Norwegian mortgages. Adding to this is the countercyclical capital buffer.
On the whole, it is estimated that the four major Swedish banks will need to have between 14.7 and 19 per cent in common equity Tier 1 capital.
In FI’s opinion, all banks will be able to meet these requirements.
