Financial stability

The financial system is working well – but the growth of debt needs to be slowed down

Picture of the Financial Stability ReportThe financial system is assessed to work well at present. However, the Swedish banking system is large and closely interlinked. Moreover, the Swedish banks have a large proportion of wholesale funding and a small proportion of capital in relation to their total assets. This means that the financial system is sensitive to shocks. According to current analysis, the factors that could result in shocks are the high level of risk-taking on the financial markets and the high and growing indebtedness of Swedish households. The Riksbank considers that measures must be taken to strengthen the banks' resilience and dampen the risks associated with household indebtedness. The Riksbank therefore recommends Finansinspektionen (the Swedish Financial Supervisory Authority) to bring forward the introduction of a leverage ratio requirement and to introduce an amortisation requirement for Swedish mortgages.

 

Press Release: The financial system is working well – but the growth of debt needs to be slowed down
The Riksbank's most recent recommendation and risk outlook

One of the Riksbank's core functions is to promote a safe and efficient payment system. The payment system is important for all economic activities and is a central component of the financial system. For that reason the Riksbank regularly analyses the risks and threats to the stability of the Swedish financial system. The purpose of this analysis is to detect changes and vulnerabilities that could lead to a serious crisis. The major Swedish banks have particular significance in the analysis. The Riksbank's assessment of stability is published twice yearly in the Financial Stability Report.

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