Finansinspektionen (FI) considers the firms in the Swedish financial system to have sufficient resilience for withstanding a weaker economy. However, commercial real estate firms are vulnerable to shocks. FI therefore makes the assessment that the banks need more capital for these exposures. This is one of the conclusions in FI’s first stability report for the year, which is being presented today.
New mortgagors are amortising, borrowing less and buying less expensive homes, but many still have high debt. These are FI’s conclusions in this year’s mortgage report. FI is also publishing an FI Analysis that shows the stricter amortisation requirement has reduced the percentage of borrowers with high debt in relation to their income.
Low interest rates have contributed to high risk-taking, rising asset prices and increasing debt. Higher interest rates in the next few years could reduce risk-taking and thus dampen the build-up of risk. However, unexpectedly large interest rate fluctuations and uncertain global developments could also test the financial sector’s resilience. These are some of the conclusions Finansinspektionen (FI) draws in this year’s second report on the stability in the financial system. The report will be presented at a press conference today.
Finansinspektionen (FI) grants Nordea Bank AB authorisation to execute its merger plan and thus move the bank’s head office to Finland.
The Swedish economy continues to be strong, and resilience in the financial system is satisfactory. However, a long period of low interest rates and strong growth has resulted in an elevated risk appetite, high asset prices and high debt. This makes the financial sector more sensitive to shocks, writes Finansinspektionen (FI) in the first Stability Report of the year, which is being presented today.
The amortisation requirement that was introduced last year has had a slow-down effect thus far. Households with new mortgages are borrowing less and buying less expensive homes, but the risks associated with high household debt remain.
Finansinspektionen (FI) reports its assessment of financial stability twice a year. At a press conference today, FI Director General Erik Thedéen and FI Chief Economist Henrik Braconier will present this year’s second stability report.
Finansinspektionen (FI) believes that securitisation can give rise to risks that are not considered in current regulation. FI is therefore submitting for consultation today the method it intends to use to assess banks’ capital requirement within Pillar 2 for flowback risks during securitisation.
Finansinspektionen (FI) is publishing two consultation memorandums today that will raise the capital requirements primarily for exposures to corporates for banks that use the internal ratings-based approach.
FI noted during the spring that Nordea's reported Probability of Default (PD) as a percentage of its corporate lending was larger than its estimated PD during certain years and in certain markets. In other words, actual PD was higher than the bank's estimated PD.
SvD published information today about FI's supervision of Nordea and the banks' internal models. FI therefore sees a need to describe and make certain clarifications about its supervision and how the capital assessment for Nordea has been handled.
SvD is publishing an article today about information in a memorandum written by FI regarding Nordea's capital needs. SvD did not receive the memorandum from FI. As a result, the confidentiality assessment that FI is obligated to conduct pursuant to the Public Disclosure and Secrecy Act has not been conducted.
Household debts are continuing to develop in an unfavourable direction. This is one of the conclusions in FI's Stability Report, which is being published today.
Nordea Bank AB (Nordea) has applied to Finansinspektionen (FI) for authorisation to execute plans under which its wholly-owned subsidiaries in Denmark, Finland and Norway will be merged with Nordea and thereafter be operated as branches. FI has decided to grant Nordea authorisation.
New mortgages must be amortised down to 50 per cent of the value of the residential property. The amortisation requirement will apply to all new loans that are collateralised by a residential property. The property may be revalued every fifth year.
Swedish households are borrowing more in relation to their income. Despite this, they have in general sufficient margins to make their payments. FI presents these and other conclusions in this year's Mortgage Survey, which is being published today.
FI today sends out a proposal which requires amortization of mortgages. The proposal is that new mortgage holders must pay their mortgages down to a 50 per cent loan-to value ratio. Starting on 1 June 2016, the amortization requirement will apply to all new loans which are collateralized by a home.
Handelsbanken has not complied with the money laundering rules. The bank has not conducted risk assessments for all of its customers or obtained sufficient information about customers and their business relations. The bank's system for reviewing transactions has also been deficient. Handelsbanken thus receives a remark and is ordered to pay an administrative fine of SEK 35 million.
There have been major deficiencies in Nordea's work to prevent money laundering. This means there is a high probability that if people have tried to launder money or finance terrorism that they could have done so without Nordea having been able to detect this. Nordea is therefore receiving a warning and is ordered to pay the maximum administrative fine of SEK 50 million.
Finansinspektionen (FI) is of the opinion that it is necessary to put an amortisation requirement in place. At the same time, the Administrative Court of Appeal of Jönköping, among others, finds deficiencies in the legal basis for FI to decide on an amortisation requirement. FI determines that the legal status is unclear and that FI's mandate needs clarifying. Therefore, at present, FI is not progressing with the amortisation requirement.