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Swedish Banks Face 25% Risk Weights as Watchdog Fights Debt

Sweden may raise risk weights further after tripling requirements this year as the regulator warns more steps may be needed to avert a housing bubble.

The Financial Supervisory Authority in Stockholm said risk weights on mortgages may be raised to 25 percent from 15 percent if household debt continues to grow, according to a statement today. The FSA urged banks to limit dividends and use surplus cash to pad buffers as risks in the real estate market grow.