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STOCKHOLM May 21 Sweden's Financial Supervisory
Authority said on Wednesday a one percent countercyclical buffer
for the country's banks is reasonable and that such a capital
demand could be activated from summer 2015.
Sweden's financial watchdog, one of Europe's toughest
regulators, said total core tier one capital demands for the
country's four biggest banks, Nordea, Handelsbanken
, Swedbank and SEB, would rise to
between 14 and 19 percent, or on average 16.4 percent.
"The capital demand should be especially high for the big,
systemically important banks since the consequences should they
run into trouble could be very serious for the broader economy,"
FSA chief Martin Andersson said in a statement.
"Our view is that the banks should be restrained with
dividends and buybacks going forward in order to meet higher
Swedish banks, some of Europe's most profitable lenders
thanks to the Nordic region's healthy economic backdrop and a
strong focus cost cuts, have been busy raising dividend payouts.
Nordea, the region's biggest bank by market
capitalisation, has already said it will raise dividends over
the next two years.
The FSA repeated its concerns about fast-rising household
debt in Sweden and said such levels motivated a one percent
countercyclical capital buffer.
(Reporting by Mia Shanley and Daniel Dickson, editing by Simon
Johnson and Niklas Pollard)