Sweden’s Banks to Face Stricter Rules Amid Global Regulatory Overhaul
In a bid to strengthen the resilience of Swedish banks and ensure critical functions can be maintained during a crisis, the Financial Supervisory Authority (FI) is proposing regulatory amendments and changes in the application of capital requirements.
Regulatory Amendments
The proposals aim to adapt Sweden’s banking framework to the European Union’s (EU) so-called “banking package,” which was adopted in 2019. The package includes reforms agreed upon by governments, central banks, and supervisory authorities worldwide following the 2008 financial crisis.
FI is seeking feedback on its proposals to amend several regulations, including:
- Finansinspektionen’s regulations and general guidelines (FFFS 2014:12) regarding prudential requirements and capital buffers
- Finansinspektionen’s regulations (FFFS 2011:1) regarding remuneration systems in credit institutions and securities companies
- Finansinspektionen’s regulations and general guidelines (FFFS 2008:25) regarding annual accounts for credit institutions and securities companies
- Finansinspektionen’s regulations and general guidelines (FFFS 2014:4) regarding the management of operational risks
FI is also proposing new regulations and general guidelines regarding the obligation of credit institutions conducting business through a branch in Sweden and that have a head office in a third country to report certain information.
Changes in Application
The proposals also include changes in the application of so-called Pillar 2 requirements, FI’s position related to the implementation of Pillar 2 guidelines, and the application of capital buffers. These changes aim to reduce unnecessary administrative burden and rectify varying applications of the regulatory framework by member states.
Entry into Force and Application
FI proposes that the regulatory amendments implementing the amendments to the Capital Requirements Directive enter into force at the same time as the corresponding legislative amendments. The amendments supplementing the Capital Requirements Regulation are proposed to enter into force on June 28, 2021. The date for applying these changes will be dependent on when the relevant legislative amendments come into effect.
Written Feedback
FI invites written feedback regarding the proposals by November 6 and the memorandum “New capital requirements for Swedish banks” by October 23. Inquiries can be directed to Sara Ehnlund Martinussen or Maria Blomberg.
The EU’s banking package aims to harmonize EU regulations in the application of tools used by supervisory authorities to determine bank capital requirements. By adapting Sweden’s banking framework, FI seeks to strengthen the resilience of Swedish banks and ensure critical functions are maintained during a crisis.