Sweden to raise capital requirements

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By Bill Thornhill
08 May 2014

The Swedish Financial Supervisory Authority (FI) on Thursday introduced tighter capital requirements for four major Swedish banks. FI intends to activate a countercyclical capital buffer and has said it will increase the risk weight of mortgages to 25% from 15%, in line with a central bank recommendation.

Last year the FI introduced a floor on mortgage risk weights of 15%, raising the risk weight from as low as 5%. The central bank, or Riksbank, said in its Financial Stability Report published in 2013 that risk weights for mortgages should rise again to 25%.

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