Sweden's financial watchdog said on Thursday capital rules for Swedish banks should be fully enforced by 2013 rather than phased in and that lenders should brace for tough countercyclical buffers.
Martin Andersson, Director General of Sweden's Financial Supervisory Authority, said a proposal to require Swedish banks to hold 10 to 12 percent Core Tier 1 capital and 15 to 16 total capital should apply to banks as soon as Basel III rules are implemented in just two years' time.
"In 2013, when the legislation is there, we don't see any problem really for Sweden as it looks right now to implement them at that point," Andersson told Reuters in an interview. Andersson said Swedish banks were well capitalised and urged them to retain their capital buffers. Growth in Sweden - one of Europe's strongest economies - was so robust that a countercyclical buffer for lenders would have been applied today, he said.
Sweden could go even further on those buffers. "We know that the minimum capital requirement as agreed in Basel III says the buffer is between 0-2.5 percent, but that's a minimum rule. It might very be that the countercyclical buffer could go above that as well," he said. "We intend to use it actively... Nothing says it can't be higher if the circumstances are there."
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