Financial Stability Report 2018:1

High and growing household indebtedness continues to pose the greatest risk to the Swedish economy. Indebtedness has been increasing for a long time and is due, in part, to a poorly functioning housing market and to the tax system not being well designed from a financial stability perspective. It is therefore important to continue with measures to reduce risks and increase resilience in the household sector, above all within these policy areas. At the same time, there are structural vulnerabilities in the Swedish banking system. Both banks’ capital levels and their ability to manage liquidity risks therefore need to be strengthened. Continued economic and political uncertainty abroad makes it even more important to manage the risks and vulnerabilities in the Swedish financial system.