* Says bank capital requirements will be higher than 12
* Swedish Bankers' Association proposes banks force bigger
* Borg welcomes proposal but says authorities will still
impose tougher rules
STOCKHOLM, March 19 Sweden's finance minister
said on Wednesday the government would heap even greater
pressure on its banks to ensure financial stability, forcing
them to hold more capital than the 12 percent required from
Swedish banks are some of Europe's most well-capitalised
lenders but authorities are worried about risks in the sector
with the size of banking assets four times the size of Sweden's
"We will end up with capital requirements over 12 percent...
We will not stop when it comes to regulations. It will be
tougher over time," Finance Minster Anders Borg said at a
banking seminar, without providing further details.
Authorities are also concerned about high levels of
household debt, at about about 170 percent of disposable income,
among the highest in Europe.
The Swedish Bankers' Association proposed earlier on
Wednesday that banks force Swedish home owners to pay down more
of their mortgage debt.
It recommended that banks require customers amortise when
debt exceeds 70 percent of the value of the home, so that debts
are paid down to that level within 10-15 years. That is lower
than a previous recommendation of 75 percent.
Borg welcomed the proposal but warned it would not deter
regulators from putting forward tougher demand on banks.
"The government, the FSA and others must still act so that
we tighten the requirements, particularly on capital adequacy.
This is a good additional measure but it is not instead of other
measures," Borg said.
The central bank has emphasised more is needed and several
board members have said tighter regulation would let it focus
more on inflation, well below the Riksbank's target, when
At current amortisation levels, it would take Swedes on
average 140 years to pay down their mortgage debts, the
Financial Supervisory Authority has previously calculated.
(Reporting by Johan Ahlander and Mia Shanley; editing by Niklas