Sweden’s Corporate Vulnerabilities: A Focus on Commercial Real Estate: SWEDEN

By Svetlana Vtyurina, Rhiannon Sowerbutts

March 21, 2023

Preview Citation

Format: Chicago

Svetlana Vtyurina, and Rhiannon Sowerbutts. Sweden’s Corporate Vulnerabilities: A Focus on Commercial Real Estate: SWEDEN, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Summary

Commercial Real Estate (CRE) debt constitute a large portion of corporate debt. Due to the funding structure this creates substantial risks for the financial system and the real economy, in general, due to broader spillover effects. Stress tests, conducted to assess the resilience of CRE sector, show that the median interest rate coverage would drop below one in a severe scenario, resulting in a ¾ of firms with debt-at-risk. CRE sector’s concentration, interconnectedness and insufficient disclosure of liabilities calls for close monitoring of liabilities structure and adjusting banks’ capital levels to better reflect current risks.

Subject: Bank credit, Corporate sector, Economic sectors, Financial institutions, Financial markets, Financial sector policy and analysis, International organization, Lines of credit, Monetary policy, Money, Securities markets, Stress testing

Keywords: Bank credit, Commercial Real Estate, Corporate sector, Corporate Vulnerabilities, CRE, CRE firm, CRE indicator, CRE sector, CRE stress test result, Credit line maturity, Global, Lines of credit, Macroprudential Policy, Real Estate Economics, Securities markets, Stress Test, Stress testing, Sweden

Publication Details

Pages:

13
Volume:

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DOI:

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Issue:

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Series:

Selected Issues Paper No. 2023/024
Stock No:

SIPEA2023024
ISBN:

9798400235962
ISSN:

2958-7875

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