## Sweden: Selected Issues

_IMF Staff Country Reports, March 16, 2023_

## Source details

**Canonical URL:** [Sweden: Selected Issues](https://www.imf.org/en/publications/cr/issues/2023/03/16/sweden-selected-issues-530940)

## Other formats

- [Markdown version](/en/publications/cr/issues/2023/03/16/sweden-selected-issues-530940/index.md)
- [Structured JSON version](/en/publications/cr/issues/2023/03/16/sweden-selected-issues-530940/index.json)
- [Bundle manifest](/en/publications/cr/issues/2023/03/16/sweden-selected-issues-530940/bundle-manifest.json)

## Bibliographic details
- Published: March 16, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400237522.002

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### Summary
- Examines Sweden’s corporate vulnerabilities with a focus on commercial real estate (CRE).
- Liquidity premia on funding costs will undermine CRE profits and lead to the increase in credit risk premia, amplifying the original shock.
- Stress tests indicate that CREs face debt servicing pressures even under a mild scenario.

### Findings on CRE vulnerabilities and stress testing
- Liquidity premia on funding costs undermine CRE profits.
- Increase in credit risk premia amplifies the original shock.
- Stress tests show debt servicing pressures for CREs even under a mild scenario.

### Disclosure and bond issuance
- The supervisory authorities and, potentially, the Securities Market Association should encourage better disclosure.
- The bond issuance template should include disclosure on liabilities, especially those in foreign currency, and contingency plans when market funding dries up.

### Policy recommendations and preparedness
- Authorities should evaluate the need to raise capital requirements for banks for CRE exposures.
- Authorities should plan now for what a potential crisis intervention might be.
  - Such intervention should be designed to limit moral hazard.
  - Plans to restore market functioning should aim to incentivize participants to re-enter the market, while considering the costs and risks to the central bank and concerns about moral hazard.

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## Content in this bundle

- **Sweden: Selected Issues; IMF Country Report No. 23/112; February 24, 2023**
  - [Sweden: Selected Issues; IMF Country Report No. 23/112; February 24, 2023 (Markdown version)](/-/media/files/publications/cr/2023/english/1sweea2023002.pdf.md){rel="alternate" type="text/markdown"}
  - [Sweden: Selected Issues; IMF Country Report No. 23/112; February 24, 2023 (PDF)](/-/media/files/publications/cr/2023/english/1sweea2023002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2023/03/16/sweden-selected-issues-530940_