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STOCKHOLM May 22 Sweden's debt office said on
Thursday it is too early to activate the countercyclical capital
buffers which the country's financial regulator wants to roll
out in the summer of 2015.
Sweden has seen a string of new bank regulations in recent
years and the Financial Supervisory Authority (FSA) said this
week it wanted to introduce a countercyclical buffer that forces
Swedish banks to hold an extra percentage point of core tier 1
capital from next summer.
That would come on top of capital requirements that are
already among the highest in Europe.
Hans Lindblad, head of Sweden's debt office, said in a
statement that a further analysis was needed before additional
regulatory measures are taken.
"Fiscal policy is expected to be tighter next year," he
said. "This makes higher demands in addition to what is already
decided, for example to activate the countercyclical capital
buffer, less appropriate in the current situation."
The Debt Office is part of the newly formed stability
council, a forum where Swedish regulators discuss and recommend
new regulation to strengthen the Swedish financial system. The
FSA has the final say on which measures are implemented.
Lindblad said good action had already taken.
"Now, however, we need a coordinated analysis and evaluation
before further steps are taken," he said.
Swedish households are among the most heavily indebted in
Europe, with debts of around 174 percent of disposable income,
prompting the central bank to keep monetary policy relatively
tight, despite low inflation pressure.
Sweden has taken several measures to cool the housing
market. The financial watchdog introduced a cap on mortgage
borrowing of 85 percent of the value of a home in 2010 and is
forcing banks to hold more capital to cover potential risks in
their mortgage portfolios.
(Reporting by Johan Ahlander; Editing by Toby Chopra)