(Updates with quotes, background)
STOCKHOLM Feb 6 Swedish Finance Minister Anders
Borg warned the country's banks that they faced further
tightening of capital rules this spring after they raised
dividend payments for 2013 despite calls from authorities to
build up more capital.
"I think that they have sent a clear signal to us," Borg
told reporters on Thursday. "They are asking us to tighten
regulations and make their implementation harder," he said.
The finance minister said the government would discuss the
issue with the central bank and the financial watchdog over the
"It seems natural that we can reach a number of conclusions
at the planned Stability Council meeting in May so that we can
get a significant strengthening of the regulatory framework into
place this spring," Borg said.
The four major Swedish banks paid their shareholders 66
percent of profits on average in 2013 - a stark contrast to
other parts of Europe. Britain's Lloyds scrapped its
2013 dividend while Switzerland's UBS is paying the
equivalent to a 30 percent ratio.
"They need stricter rules. That is in practice what they are
telling us", Borg said.
The finance minister said the government was prepared to use
"all the instruments available," including countercyclical
buffers, systemic risk buffers, risk weights and other
Swedish lenders have built up some of the biggest capital
buffers in Europe and easily meet existing regulatory capital
requirements in Sweden, even if these are among the toughest in
Sweden has a one of Europe's largest banking sector's
relative to the size of the economy and Swedish households are
also among the most heavily indebted.
A number of steps have already been taken to reduce the
risks in the financial sector. The FSA has imposed a 85 percent
loan-to-value ratio for new mortgages and has raised risk
weights for mortgages, forcing banks to set aside more capital.
(Reporting by Johan Sennero and Johan Ahlander; Editing by