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Financial Stability Report 2011:2

Financial Stability Report 2011:2. Banks are resilient. …but there is considerable uncertainty. Financial market unrest. Interest on ten-year government bonds. Source: Reuters EcoWin. Household and company borrowing is slowing down. Source: The Riksbank. Limited loan losses.

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Financial Stability Report 2011:2

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  1. Financial Stability Report2011:2

  2. Banks are resilient

  3. …but there is considerable uncertainty

  4. Financial market unrest Interest on ten-year government bonds Source: Reuters EcoWin

  5. Household and company borrowing is slowing down Source: The Riksbank

  6. Limited loan losses The major Swedish banks, totalled over four quarters, SEK billions, fixed prices, September 2011 Sources: Bank reports and the Riksbank

  7. The banks are well-capitalised compared to other countries Core Tier 1 capital ratios in accordance with Basel II Sources: Bank reports and the Riksbank

  8. The banks can manage significantly weaker development CET 1 capital ratios according to Basel III initially and in stress test Sources: Bank reports and the Riksbank

  9. The banks’ liquidity risks Survival period, number of days, assuming that the banks experience stressed deposit outflows and fail to refinance half of the market funding that falls due during a 3-month period. Sources: Liquidatum and the Riksbank

  10. The Riksbank’s recommendations • The major Swedish banks should maintain or continue to increase their current CET 1 capital ratios • The major Swedish banks should continue to reduce their funding and liquidity risks • The major Swedish banks should continue to improve their public liquidity reporting

  11. Higher capital adequacy requirements than the Basel III minimum • At least 10 per cent from 1 January 2013 • At least 12 per cent from 1 January 2015 • According to Basel III, 7 per cent gradually during 2013 -2019 Capital adequacy requirements specified excluding countercyclical buffer

  12. Short-term liquidity measure should be introduced earlier Start dates according to the Basel Committee’s proposals and the Riksbank’s recommendations Source: The Riksbank

  13. Liquidity reporting needs improvement The table is based only on information in the banks’ interim reports. Sources: Bank reports and the Riksbank

  14. Banks are resilient

  15. EXTRA SLIDES

  16. The banks’ balance sheets in relation to GDP The major Swedish banks´ foreign operations The data refers to December 2010 Sources: The ECB, the Swiss National Bank and the Riksbank

  17. Capital adequacy requirements for the major Swedish banks

  18. Capital adequacy requirements in different countries Low-trigger CoCos 6% Bail-in bonds 3.5% Othercapital 3.5% Othercapital 3.5 % Othercapital 3.5% High-trigger CoCos 3% 12.0% CCB 2.5% 10.0% 10.0% Othercapital 3.5% 9.5% CCB 2.5% CCB 2.5% CCB 2.5% SIB surcharge 5% 7.0% Buffer 3% Ring-fence buffer 3% TBTF buffer 3% CCB 2.5% 4.5% 4.5% 4.5% Basel minimum 4.5% Basel minimum 4.5% Basel minimum 4.5% Basel minimum 4.5% Basel minimum 4.5% Basel III minimum Austria United Kingdom Sweden Switzerland The data refers to December 2010. Not incl. countercyclical cap. buffers. CCB (Capital Conservation Buffer) Sources: Basel Committee on Banking Supervision, Swiss FMSA, SverigesRiksbank, OesterreichischeNationalbank, Independent Commission on Banking

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