Elevated risk

In a report presented on Thursday, Sweden’s financial supervisory authority Finansinspektion (FI) said that new rules introduced in June last year, forcing new mortgage borrowers to pay down their loans, had helped make households more resilient, but the full effect would take years to realise (ed.). FI’s chief economist, Henrik Braconier, warned of an elevated risk that house prices could fall sharply, as could income, and of the likelihood of rising interest rates.

Raised capital requirements for banks

Yesterday the Swedish Financial Supervisory Authority (Finansinspektionen) suggested further tightening of the requirements on banks’ lending to corporates, putting more pressure on the banking sector.

The new rules entail raising the risk weight for corporate lending, which will mean that the average risk weight is expected to exceed 30%. The risk weight determines how much capital the bank must have as a buffer for each krona loaned.

The news hit Handelsbanken in particular, whose shares closed at a minus.