Sweden: Financial System Stability Assessment
IMF Staff Country Reports, March 16, 2023
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- Sweden: Financial System Stability Assessment
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Bibliographic details
- Published: March 16, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400237553.002
Macroeconomic recovery and outlook
- Sweden recovered rapidly from the coronavirus disease 2019 crisis, and gross domestic product reached its pre-pandemic level in mid-2021.
- Going forward, growth is expected to slow amid higher energy prices, tighter financial conditions, and reduced confidence following sharply lower house prices.
Financial sector position and resilience
- In the context of a robust supervision and regulation framework, the financial sector exited the crisis with substantial capital and liquidity buffers.
- Stress tests indicate that banks are broadly resilient to simulated shocks, as their capital should remain above minimum requirements.
Key risks identified
- Rapid digitalization of the Swedish payment system raises risks of cyber-attacks and of supervision falling behind.
- Commercial real estate and residential real estate risks warrant attention for banking sector resilience.
- The materiality of Central Bank Digital Currency risks on the financial system should be further evaluated.
Policy recommendations and supervisory priorities
- Authorities should consider higher capital requirements for banks given commercial real estate and residential real estate risks.
- Address resource constraints to strengthen supervision of banks and fintech firms.
- Expand the macroprudential policy toolkit and improve coordination among institutions.
- Further evaluate Central Bank Digital Currency risks to the financial system.
Subject areas and keywords (as provided)
- Subject: Crisis management, Financial crises, Financial Sector Assessment Program, Financial sector policy and analysis, Fintech, International organization, Monetary policy, Stress testing, Systemic risk, Technology
- Keywords: Baltics, bank resolution plan, bank stress tests, commercial real estate, coverage ratio, Crisis management, derivative markets activity, Financial Sector Assessment Program, Fintech, FSAP bank solvency stress tests, Global, liquidity shock, risk dashboard, Stress testing, Systemic risk
Content in this bundle
- Sweden: Financial System Stability Assessment; IMF Country Report No. 23/113