Financial Stability Report 2025:1

High political uncertainty abroad increases stability risks. The abrupt shifts in trade and security policies have led to unusually high levels of uncertainty. The risk of sudden and unforeseen events is high and in a global and interconnected financial system, the consequences of such events can be significant and quickly spread. The high level of debt and elevated asset valuations in many parts of the world also make the system vulnerable.

The resilience of the financial system must be safeguarded. Global regulatory standards have made the financial system more robust. Simplifying some regulation may be welcome, but in several countries powerful forces are trying to weaken regulations to give their own banks a competitive advantage. This could ultimately threaten financial stability. It is important that global regulatory standards, are fully and consistently implemented in all countries and that the regulation of both banks and non-banks is sufficiently comprehensive to mitigate stability risks.

Major Swedish banks are in a position to deal with turbulence. The major banks meet their capital and liquidity requirements by an ample margin and have high profitability. However, the dependence of the major Swedish banks on international capital markets constitutes a vulnerability, and foreign actors own a significant part of their covered bonds. It is important that the banks strengthen their resilience to operational risks such as cyber threats and third-party dependencies. At the same time, the activities of consumer credit banks remain associated with relatively high risks.

Households' margins have strengthened, but they are vulnerable to new shocks. Rising real incomes are benefiting households, and mortgagors are well able to meet their interest and amortisation payments. At the same time, economic activity is weak, and many households are still under financial pressure. Low-income households in particular state that they consume above their income. To prevent household debt from once again rising in a way that is not sustainable in the long term, it is important to have well-balanced macroprudential measures, such as amortisation requirements and mortgage caps.

Property companies and funds need to strengthen their resilience. Companies are weighed down by increased uncertainty and weaker growth prospects. Property companies are particularly vulnerable. While their financial conditions are relatively favourable, their debt levels are high and there is a risk of falling property values, especially given the continued weakness in the rental market. Corporate bond funds are an important source of financing for the sector. Large redemptions from these funds can thus create problems for the financing of property companies. New requirements for liquidity management in the funds help to reduce these risks. It is important that fund platforms adapt so that the new regulations have an impact.

Banks need to have more active liquidity management. It is important for the Riksbank’s management of interest rates that the banks that are the Riksbank's monetary policy counterparties have operational capacity and are willing to borrow and lend liquidity among themselves on the overnight market. Banks should also be willing, if necessary, to borrow from the Riksbank by utilising its liquidity provision instruments.