UPDATE 2-Sweden flags tougher rules for banks
* Government wants high "rainy-day" buffers for banks
* May further tighten rules on lenders
* Measures seen due to size of sector, high household debts
* Bank shares fall, lag local index and European sector (Adds more minister comments, detail, background, shares)
By Anna Ringstrom and Simon Johnson
STOCKHOLM, Aug 26 (Reuters) - Sweden should introduce tough new capital requirements for its banks, already subject to some of the world's most stringent regulations, to shield taxpayers from any future bailouts, the government said on Monday.
Although none of Sweden's banks went bust in the financial crisis, the sector is viewed as a potential pressure point because it dwarfs the domestic economy with assets about four times the size of annual output and because of high levels of household debt.
The country plans to introduce so-called "counter-cyclical" capital buffers for its banks next year, which will be in addition to other capital requirements.
Financial Markets Minister Peter Norman told a news conference the government wanted these buffers to start at the high end of a previously given range of 0-2.5 percent of banks' risk-weighted assets, despite a still sluggish economy.
"It's up to the Financial Supervisory Authority to decide their exact levels but with the structure of the Swedish bank system, it is reasonable to have high (levels)," he said.
He said such buffers should be lowered in the event of another financial crisis but should remain high otherwise.
Most analysts had expected the counter-cyclical buffers to be introduced at the lower end of the range, and bank shares fell on Monday.
Nordea shares were down 2.3 percent, Handelsbanken 1.9 percent, SEB 1.8 percent and Swedbank 1.4 percent at 1325 GMT, lagging the wider market in Stockholm and the European banking index.
The banks declined to comment on the news.
Norman said Sweden's banks were well capitalised and robust, but that more needed to be done to ensure financial stability and the centre-right government was looking at further ways to tighten regulations.
"It is ... our view that going forward we need to further increase the buffers in the Swedish bank system," Norman told a news conference.
Norman did not specify what any extra measures might be.
Sweden's banks already face a requirement to hold capital equivalent to 10 percent of their risk-weighted assets, rising to 12 percent by 2015. The Basel Committee on Banking Supervision requires banks to have a core tier one capital ratio of 7 percent by 2019.
Household debt in Sweden - at about 170 percent of disposable incomes - is among the highest in Europe, worrying the central bank which has kept monetary policy relatively tight despite high levels of unemployment, low inflation and a slowdown in the economy.
The government also said on Monday that banks should pay a charge to finance the country's increased foreign currency reserve, needed because the banks borrow heavily in currencies other than the krona.
Last year, Sweden toughened rules for how much banks much put aside to cover possible losses for mortgage lending.
The major banks have been building up capital, raising costs but also making them some of Europe's safest, most attractive lenders for investors. (Additional reporting by Johan Ahlander, Daniel Dickson and Oskar von Bahr; Editing by Louise Heavens and Mark Potter)