FI Issues Updates on CCyB and Reporting by Banks and Investment Firms
As part of the reporting updates under the Capital Requirements Regulation (CRR) and Investment Firms Regulation (IFR), the Swedish Financial Supervisory Authority FI has updated the list of deactivated EBA validation rules and the questions and answers on reporting requirements for banks and investment firms. In another update, FI announced its decision to maintain the countercyclical capital buffer (CCyB) at 0% until at least the third quarter of 2021. However, FI will apply a positive neutral rate of 2% in the future and will only raise the buffer above the neutral rate, when systemic risks are elevated enough to motivate a higher buffer rate than 2%.
FI also published a new memorandum that describes the general principles for setting the CCyB rate. From this point onward, FI will make a quarterly assessment, but will make a new decision only if the buffer rate is changed, or if there is a need to provide clearer guidance. In its report on the Swedish Mortgage Market, FI highlights that temporary exemption from the amortization requirements, which FI introduced in April 2020, will expire on August 31, 2021. As of January 2021, nearly 230,000 households in the mortgage portfolios of banks have been granted temporary exemption from amortization payments. In the FI sample of new mortgagors in 2020, roughly 9% had applied for and been granted exemption from amortizing all or parts of their new mortgages. The report also highlights that new mortgagors who were granted exemption tend to have larger loans in relation to both the value of their home and their income relative to other mortgagors who amortize.
Related Links (in English and Swedish)
- News on Validation Rules
- Deactivated Validation Rules (XLSX)
- Q&A for Banks
- Q&A for Investment Firms
- Press Release on CCyB Rate
- Press Release on Mortgage Market Report
Keywords: Europe, Sweden, Banking, Securities, Investment Firms, Reporting, Validation Rules, Q&A, CRR, Basel, CCyB, Regulatory Capital, Systemic Risk, Mortgage Lending, Credit Risk, FI
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