Finansinspektionen notes that households are now under pressure, both from rising interest rates and from all other cost increases. Households’ large debts, which have been built up over a long period of time, involve a risk.
“Interest rates are rising and the vulnerabilities that have been built up over a long period of low interest rates and high risk-taking are now being exposed. Although stability can be strengthened in the long term by a normalization, highly indebted households and companies are now under pressure, ”writes Finansinspektionen’s Director General Erik Thedéen in a press release.
It may be that many households are unable to pay their debts, and this may put banks at risk of losses.
Finansinspektionen has therefore decided to raise the so-called countercyclical buffer value to a neutral level of 2 percent in June. This means that the requirement for the capital that banks must have in readiness for crises is now increasing.
Even companies and commercial real estate companies may be affected, according to FI.
“One sector that is particularly vulnerable to higher interest rates is the commercial real estate sector. The sector is now being challenged by rapidly rising financing costs, which will reduce profitability and may lead to property prices falling, ”writes FI.
“In light of these risks, banks still need to have large capital buffers,” states FI.