IMF Staff Completes 2016 Financial Sector Assessment Program (FSAP) Mission to Sweden
IMF News, September 2, 2016
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Bibliographic details
- Published: September 2, 2016
Mission overview
- Press Release No. 16/391
- Date: September 2, 2016
- Mission head: Martin Cihak
- Mission visits: April 18–29 and August 22–September 2, 2016
- Purpose: Conduct an assessment under the Financial Sector Assessment Program (FSAP) to provide input to the Article IV consultation and evaluate Sweden’s financial sector resilience, regulatory and supervisory framework, and crisis management and resolution capacity.
- Principal interlocutors: Riksbank, Ministry of Finance, Finansinspektionen, Swedish National Debt Office, members of Parliament, banks and financial services companies, financial market infrastructure providers, policy research organizations, think-tanks, nongovernment organizations, professional associations, auditors, and officials from other countries in the Nordic-Baltic region.
- Contact (IMF Communications Department): PRESS OFFICER: Andreas Adriano; Phone: +1 202 623-7100; Email: MEDIA@IMF.org
Key findings
- Since the previous FSAP in 2011, Swedish authorities have strengthened the policy and regulatory framework, including:
- creating the Financial Stability Council,
- bolstering Finansinspektionen’s resources,
- introducing a new resolution framework for credit institutions and investment firms.
- Sweden’s financial system characteristics:
- among Europe’s largest relative to the size of the domestic economy,
- complex and highly interconnected domestically and internationally,
- reflects Sweden’s role as a regional financial hub.
- Systemic expectations: The systemic nature of the Swedish financial sector raises expectations for the quality of the financial sector policy framework and financial safety nets.
- Macrofinancial risks have grown since 2011, evidenced by:
- the large increase in housing prices,
- the associated rising share of highly indebted households.
- Financial safety nets: "Sweden’s financial safety nets rest on strong fundaments, but improvements are needed to ensure operational capacity to quickly deploy recovery and resolution tools." — Cihak
Macrofinancial analysis and assessments undertaken
- The mission examined:
- legal and governance framework for systemic risk oversight and macroprudential policy,
- stability analysis, including in-depth stress tests,
- risks from household debt,
- structural liquidity risks from wholesale funding,
- arrangements for cross-border supervision and crisis preparedness and resolution in a regional context.
Policy implications and recommendations (preliminary)
- Further steps are warranted to:
- strengthen Sweden’s systemic risk oversight,
- strengthen the macroprudential framework,
- improve operational capacity to quickly deploy recovery and resolution tools.
- The mission shared preliminary findings and recommendations with the authorities; these are intended to be tailored to Sweden’s country-specific circumstances.
Next steps and dissemination
- The FSAP findings will provide a key input to the upcoming Article IV consultation for Sweden.
- Anticipated follow-up: "It is anticipated that a final report from the FSAP—the Financial System Stability Assessment—will be presented to the IMF’s Executive Board in November." — Cihak
IMF Staff press release, September 2, 2016; Press Release No. 16/391. The views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.