The Basel Committee has completed a capital framework intended as a response to the 2008 financial crisis. The Committee announced that the agreement includes new curbs on how banks estimate the risk of mortgages, loans and other assets on their books in an effort to improve the transparency and health of lenders’ balance sheets.
Scandinavia’s financial industry has argued that the rules will hit banks unduly harshly by failing to take into account their low default histories. In Scandinavia, lenders have typically relied on their own internal models to determine how risky their assets are and how much capital they need to hold.
Sweden’s Financial Supervisory Authority will “wait for new EU regulations before we can decide on new requirements,” said Director Erik Thedeen. Moreover, Sweden’s financial regulator said it won’t automatically start raising banks’ capital standards based on the Basel Committee’s completed framework.