The outlook for financial stability has improved somewhat, and uncertainty has decreased, but we are still in the middle of a recession. Higher costs for both interest payments and other goods and services are putting pressure on households and firms. The worsened global security situation is also imposing increased demands on the operational resilience in the financial sectorn. These are the conclusions of this year's first stability report.
The higher interest rate means that households and companies need to make adjustments to their finances. Finansinspektionen (FI) is now seeing a decline in risk-taking. However, the change in the state of the economy and uncertainty regarding how long the higher interest rates will remain pose a risk to financial stability. Commercial real estate undertakings with high debt are particularly at risk should the interest rates remain high. These are the conclusions of the second Stability Report of the year.
FI has classified Nordea Liv Försäkringsgrupp, an insurance group based in Sweden, as an Internationally Active Insurance Group (IAIG). For its supervision, this means that there are special international standards and guidelines that the International Association of Insurance Supervisors (IAIS) supports.
The process for product approval is central from a consumer protection perspective. It aims to ensure that insurance undertakings focus on consumer interests when they develop and maintain insurance products. In an in-depth analysis that Finansinspektionen has conducted, we have seen a number of good examples of how undertakings work with and apply this process.
The risks given the highest priority in FI’s consumer protection work for 2023 are unaffordable lending, unsuitable investment products and investment fraud.
Digitalisation introduces both opportunities and risks to the financial market. After conducting a new survey, FI has noted that broader regulation on how customer data can be shared with third-party providers could make it easier for consumers to compare financial products such as occupational pensions and mortgages.
Since the publication of the stability report last autumn, inflation has slowed somewhat in the large economies but is still significantly higher than the central banks’ inflation targets. Monetary policy has therefore been tightened further, and interest rates continued to rise. High inflation and rising interest rates mean that the forecasts for global economic development continue to be weak.
In force from 2023-01-01
During 2022, the International Monetary Fund (IMF) carried out a special assessment of the financial sector in Sweden, a so-called FSAP (Financial Sector Assessment Program). FSAPs are conducted regularly for member countries with systemically important financial markets. The most recent FSAP for Sweden by the IMF was in 2016.
You do not need special insurance when buying, for example, a new TV or a dishwasher. This is the conclusion of our review of so-called gadget insurance, which is often offered in retail. If you have home insurance, you have good protection.