IMF Urges Sweden to Build Bank Buffers Against Property Risk
- Risks to commercial real estate stand out, IMF official says
- Swedish home prices have led declines among wealthy economies
Houses in the Slottsberget district of Gothenburg, Sweden.
Photographer: Nora Lorek/BloombergThis article is for subscribers only.
The International Monetary Fund said Sweden might have to require banks to hold more capital and increase funding for the financial regulator, as risks rise in the country’s property sector.
Swedish housing as well as commercial real estate has come into focus as the prices of homes have plunged in the last nine months, and property companies are facing a funding squeeze as large bond volumes approach maturity. The financial watchdog’s stress tests have shown little risk that credit losses would surge even in a prolonged housing slump, while there are more concerns regarding commercial property.