New bank regulations threaten growth

More major international bank standards, Basel 4, are in progress, intended to limit how banks use internal models for calculating different types of risk when lending and to introduce a leverage ratio requirement.

However Hans Lindberg, CEO of the Swedish Bankers’ Association, warns that the tougher capital requirements from Basel could hit jobs and growth hard and shrink GDP by over four percent. “Paradoxically the Swedish and Nordic banks, which are the strongest and with the best capital coverage and ratings, will probably be hit hardest by the new regulations,” he says.

Hans Lindberg says the government must take action, as this will have a significant impact on the Swedish economy.