Featured Product

    FI on Capital Rules for Banks and Reporting Rules for Investment Firms

    August 25, 2021

    The Swedish Financial Supervisory Authority (FI) issued new regulations on reporting requirements for investment firms, in accordance with the Investment Firms Regulation and Directive (IFR and IFD). FI will inform when test reporting in the new reporting portal Fidac will be possible. In addition, FI published the capital requirements of the largest Swedish banks and credit institutions that belong to the supervisory categories 1 and 2 as of the end of the second quarter of 2021. The capital requirements have been published for Handelsbanken, SEB, Swedbank, Landshypotek, Länsförsäkringar, Kommuninvest, Svensk Exportkredit (SEK), SBAB, Skandiabanken, Avanza, Nordnet, and Sparbanken Skåne.

    At the end of 2020, new rules were introduced, which change the application of capital requirements going forward. The risk assessments and the accompanying capital requirements and liquidity requirements determined during the Supervisory Review and Evaluation Process (SREP) of FI apply until the new SREP decisions are made under the new regulation. The following capital requirements apply in the second quarter of 2021:

    • The capital allocation for Pillar 2 additional own funds requirements for concentration risk, interest rate risk, and additional market risk and pension risk shall comply with the main rule introduced in Chapter 2, section 1a of the Supervision Act.
    • For other Pillar 2 additional own fund requirements, the capital allocation in the SREP decisions applies until further notice.
    • For three major banks (Handelsbanken, SEB, and Swedbank), the 2% additional requirement for systemic risk in pillar 2 has been removed, other systemically important institutions (O-SII) buffer has been changed to 1%, and systemic risk buffer is 3%.
    • As of March 16, 2020, Sweden applies a countercyclical buffer of 0%.

    FI also announced that the recommendation regarding restrictions on dividend distribution will not be further extended and will expire on September 30, 2021. Since the uncertainty regarding the Swedish economy due to the pandemic has decreased, it is reasonable to now remove the recommendation. This means that FI will return to the normal supervision procedure for assessing the risks and capital needs of banks. The banks' boards of directors bear responsibility for assessing the capital buffers banks should hold over and above the capital requirements set by FI and propose dividends to their annual general meetings given these capital requirements. Considering a combination of the remaining systemic risks and the economic recovery, FI will raise the countercyclical capital buffer in 2021; this was communicated in the stability report at the beginning of June and is something that the banks must take into account.


    Related Links

    Keywords: Europe, Sweden, Banking, Investment Firms, IFR, IFD, Reporting, Test Environment, FIDAC, Regulatory Capital, Basel, Pillar 2, SREP, Systemic Risk Buffer, O-SII Buffer, CCyB, Dividend Distribution, FI

    Featured Experts
    Related Articles

    EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis

    The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.

    November 28, 2023 WebPage Regulatory News

    EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules

    The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.

    October 31, 2023 WebPage Regulatory News

    BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks

    As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.

    October 19, 2023 WebPage Regulatory News

    BCBS and EBA Publish Results of Basel III Monitoring Exercise

    The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.

    October 18, 2023 WebPage Regulatory News

    PRA Updates Timeline for Final Basel III Rules, Issues Other Updates

    The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.

    October 18, 2023 WebPage Regulatory News

    US Treasury Sets Out Principles for Net-Zero Financing

    The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.

    October 17, 2023 WebPage Regulatory News

    EC Launches Survey on G7 Principles on Generative AI

    The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.

    October 14, 2023 WebPage Regulatory News

    ISSB Sustainability Standards Expected to Become Global Baseline

    The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.

    September 18, 2023 WebPage Regulatory News

    IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance

    Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.

    September 18, 2023 WebPage Regulatory News

    BCBS Assesses NSFR and Large Exposures Rules in US

    The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.

    September 14, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8938