FI to Ease Restrictions on Dividend Payments, Increase CCyB
The Swedish Financial Supervisory Authority (FI) has decided not to extend the recommendation on restrictions on dividend payments and share repurchases by banks, as the Swedish economy is in a clear recovery phase. The recommendation expires on September 30, 2021. This means that FI returns to the normal supervisory process for assessing the risks and capital requirements of banks. Additionally, FI has decided to increase the countercyclical capital buffer, or CCyB, value from 0% to 1% from September 29, 2022.
FI had reduced the countercyclical buffer value from 2.5% to 0% in March 2020, due to the economic uncertainty associated with the outbreak of the COVID-19 pandemic. FI has decided to increase the CCyB buffer since the situation continues to improve and the risks of large credit losses at banks have decreased. In addition, the rise in asset prices and housing prices, together with rising household debt, point to increased risks in the financial system, thus indicating a need for capital buffers. An implementation period of 12 months means that the new value will begin to be applied on September 29, 2022. FI aims to gradually increase the buffer value to 2% in 2022 if the economic recovery continues, credit losses are low, and banks can meet the demand for credit. If the risks associated with asset markets and indebtedness remain, FI may subsequently increase the buffer value even further. Additionally, a new decision-making procedure will be introduced from now on for the CCyB, resulting in the repeal of the regulations on countercyclical buffer value and replacing them with special decisions.
Related Links
Keywords: Europe, Finland, Banking, CCyB, Regulatory Capital, Dividend Distribution, Basel, COVID-19, Macro-Prudential Policy, FI
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
FCA Issues Update on Arrangements for Wind-Down of LIBORRelated Articles
APRA Publishes Results of Climate Risk Self-Assessment Survey
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
ACPR Publishes Updates Related to CRD IV and Covered Bonds
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
EIOPA Publishes Guidance on Climate Change Scenarios in ORSA
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
EBA and ECB Respond to Proposals on Sustainability Disclosures
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
EBA Publishes Multiple Regulatory Updates for Regulated Entities
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
EESC Opines on Proposals on CRR and European Single Access Point
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury Publishes Multiple Regulatory Updates in July 2022
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.
