March 13, 2020 / 8:16 AM / 24 days ago

FSA cuts capital requirement buffer for Swedish banks to zero

STOCKHOLM (Reuters) - Sweden’s Financial Supervisory Authority (FSA) said on Friday it had lowered the so called counter cyclical capital buffers for the country’s banks to allow them to maintain credit supply.

“It is done as a precautionary measure, in order to safeguard a well-functioning credit supply that makes it easier for companies and households to maintain production, consumption and investment,” the FSA said in statement.

The FSA said the cut to zero from 2.5% corresponded to about 45 billion Swedish crowns (3.70 billion pounds) lower capital requirement for Swedish banks.

The FSA said the resilience in the financial system was still satisfactory and that Swedish banks were profitable.

Reporting by Johan Ahlander; editing by Niklas Pollard

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