Watchdog bites back

In a recent poll of the financial services industry, just 63% of respondents believed that Sweden’s Financial Supervisory Authority made any contribution to the smooth running of the market. Martin Noréus, acting director general of the watchdog, believes the low rating has to do with the introduction of new rules and tougher supervision.

Meanwhile, Stefan Ingves, the governor of the Riksbank, has criticised the authority for doing too little to curb consumer debt in Sweden. In response, Noréus says: “We share the same view as the Riksbank, that there is a risk when consumer debt escalates.   However, we hold slightly different views on how great the risk is. We believe this is more of a risk that builds up over time, so we feel it is reasonable to implement measures gradually”.

Noréus rejects Ingves’ proposal to impose stricter capital requirements on banks, saying the watchdog has found that the banks are practising sound credit risk management and have more than enough capital to cover their risks.