Swedish banks affected by raised capital requirements

Swedish Financial Supervisory Authority ordered raising of capital adequacy for banks loans, which means that banks will have to hold more capital from now on.

Landers in Sweden use internal risk weight calculation methods which lead to higher risk as Swedish Regulator claims, but the industry answers that historical losses were on the low level. As risk weights are distributed over the wide range, this action should position it at more than 30% for all banks.

Raising of regulatory capital affected Swedish banks, among which Svenska Handelsbanken AB had the largest drop in shares: A shares sank 3.00%, while the B shares lost 0.76% by 10:56 a.m. CET, after briefly plunging as much as 5%.

This measure is in accordance with the recommendations of Basel Committee on Banking Supervision and European authorities and should reflect the actual risk in banking sector. Changes are made “as a result of changed maturity assumptions” in Pillar 2.

Image: Nasdaq OMX Nordic

Baha Breaking News (BBN) / ZR