May 19 (Bloomberg) -- Sweden promised to bring its laws on capital requirements for banks into compliance with European Union law after the EU’s executive arm told the government to make the changes within two months or face a lawsuit.
The new rules “are meant to come into force on June 30,” Victoria Ericsson, a spokeswoman for Sweden’s Finance Ministry, said by telephone in Stockholm today. “In the wake of the financial crisis, there has been a need for comprehensive regulatory work both on a global and EU level and these things take a bit of time to implement.”
The European Commission said 10 member states, including Sweden, had failed to “fully” put in place rules on increasing the capital reserves that lenders must hold against potential losses. If the measures aren’t implemented within two months, the commission may take offenders to the European Court of Justice.
The Swedish government and central bank are pushing for stricter requirements than those proposed by the Basel III global capital framework that’s being worked out following the global financial crisis.
Banks should prepare for a one percentage point increase in capital requirements every year “over the next few years,” Finance Minister Anders Borg said in March. The government is due to present a detailed proposal on banking regulations by the end of the year or early in 2012.
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