Cooperation on countercyclical capital buffer

The countercyclical capital buffer aims to increase banks' resilience when systemic risks build up in the financial system . Unlike other requirements in the capital adequacy framework, the countercyclical capital buffer can vary over time. In the event of a crisis, the buffer requirement can be reduced, or set to zero. This increases the headroom down to the binding capital requirements, thereby freeing up capital that banks can use to both manage losses and support lending to households and companies. In this way, it can help to slow down an economic downturn.

In Sweden, Finansinspektionen has been responsible for setting the countercyclical buffer value every quarter since 2014. They must also calculate a countercyclical buffer value for each quarter. Since March 2021, Finansinspektionen has aimed to maintain the countercyclical capital buffer at 2 per cent in normal times. More information is available at fi.se, financial stability.

The Riksbank has previously, via consultation procedures and the Financial Stability Report, provided its views on systemic risks and the level of the countercyclical capital buffer. The Government has now formalised by law that, as of July 2024, the Riksbank will be given the opportunity to comment before Finansinspektionen calculates both the countercyclical buffer value and makes a decision to set or change the buffer rate.  This increases the opportunities for the Riksbank to express views on more occasions than before and for the authorities to discuss the level and development of systemic risks in the Swedish financial system.

The cooperation between Finansinspektionen and the Riksbank normally takes place quarterly, and in connection with this, the Riksbank publishes its opinion on this website.