September 19, 2018 / 6:27 AM / 3 months ago

Swedish FSA hikes countercyclical capital buffer for banks

STOCKHOLM, Sept 19 (Reuters) - Sweden’s Financial Supervisory Authority said on Wednesday it had decided to hike part of the capital buffer lenders must hold to 2.5 percent of risk-weighted assets, due to increased risks in the banking system.

“One indication that the risks in the financial system have increased is that the combination of low interest rates and low risk premiums,” the FSA said in a statement.

The FSA last raised the buffer - which moves up and down over time in relation to the perceived level of risk in the banking system - in March 2016 when it increased to 2 percent. The new level will apply from September 2019.

Reporting by Simon Johnson

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