FI Announces Reporting Updates and Stress Test Results for Banks
The Swedish Financial Supervisory Authority (FI) published results of the stress test conducted in 2022, along with updates on remuneration reporting for credit institutions and investment firms. FI explains that, starting from the reference date December 31, 2022, there are three different EBA guidelines that govern the remuneration reporting. This impacts the reporting modules REM BM, REM GAP, REM HR, and REM HE. FI notes that the last date for submitting the reports is shown in the FI reporting calendar and that, on the reporting portal Fidac, the reporting information for various companies and groups will be shortly clarified.
The 2022 stress test highlights the impact of high inflation and high interest rates on the financial stability of the five largest Swedish banks and indicates commercial real estate sector as most vulnerable in this environment. The stress test results indicate that major Swedish banks have significant resilience against a deterioration in earnings and the credit losses that can occur in a serious scenario. FI uses macro stress tests as a tool to assess the resilience of individual banks and the stability of the financial system. The results show that, on average, the core Tier 1 capital ratio decreased by just over 2 percentage points. The management buffer of banks, that is, the difference between the actual Common Equity Tier 1 capital and the Common Equity Tier 1 capital requirement, decreased on average from 5.6 to 3.4 percentage points. The minimum management buffer decreased from 4.3 to 2.6 percentage points. The positive management buffer indicates that no bank violates either capital requirements or its Pillar 2 guidance in the stressed scenario.
Related Links (in Swedish)
Keywords: Europe, Sweden, Banking, Stress Testing, Reporting, Basel, Regulatory Capital, Liquidity Risk, Financial Stability, Commercial Real Estate, CET 1, Pillar 2, Corporate Bonds, Remuneration Benchmarking, Investment Firms, EBA, FI
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