Financial Stability Report 2011:2

Banks are resilient

…but there is considerable uncertainty

Financial market unrest Interest on ten-year government bondsSource: Reuters EcoWin

Household and company borrowing is slowing down Source: The Riksbank

Limited loan losses Sources: Bank reports and the RiksbankThe major Swedish banks, totalled over four quarters, SEK billions, fixed prices, September 2011

The banks are well-capitalised compared to other countries Core Tier 1 capital ratios in accordance with Basel IISources: Bank reports and the Riksbank

The banks can manage significantly weaker development Sources: Bank reports and the Riksbank CET 1 capital ratios according to Basel III initially and in stress test

The banks’ liquidity risks Sources: Liquidatum and the RiksbankSurvival period, number of days, assuming that the banks experience stressed deposit outflows and fail to refinance half of the market funding that falls due during a 3-month period.

The Riksbank’s recommendations The major Swedish banks should maintain or continue to increase their current CET 1 capital ratios The major Swedish banks should continue to reduce their funding and liquidity risks The major Swedish banks should continue to improve their public liquidity reporting

Higher capital adequacy requirements than the Basel III minimum At least 10 per cent from 1 January 2013 At least 12 per cent from 1 January 2015 According to Basel III, 7 per cent gradually during Capital adequacy requirements specified excluding countercyclical buffer

Short-term liquidity measure should be introduced earlier Start dates according to the Basel Committee’s proposals and the Riksbank’s recommendations Source: The Riksbank

Liquidity reporting needs improvement The table is based only on information in the banks’ interim reports.Sources: Bank reports and the Riksbank

Banks are resilient

EXTRA SLIDES

The major Swedish banks´ foreign operations The banks’ balance sheets in relation to GDP The data refers to December 2010Sources: The ECB, the Swiss National Bank and the Riksbank

Capital adequacy requirements for the major Swedish banks

Basel minimum 4.5% Ring-fence buffer 3% CCB 2.5% Basel minimum 4.5% SIB surcharge 5% CCB 2.5% 9.5% 12.0% United KingdomSweden Basel minimum 4.5% TBTF buffer 3% CCB 2.5% Switzerland Basel minimum 4.5% Buffer 3% CCB 2.5% Austria Basel minimum 4.5% CCB 2.5% Basel III minimum Other capital 3.5% Other capital 3.5 % Other capital 3.5% Bail-in bonds 3.5% Other capital 3.5% Low-trigger CoCos 6% 4.5% 10.0% 4.5% 7.0% 4.5% 10.0% High-trigger CoCos 3% The data refers to December Not incl. countercyclical cap. buffers. CCB (Capital Conservation Buffer) Sources: Basel Committee on Banking Supervision, Swiss FMSA, Sveriges Riksbank, Oesterreichische Nationalbank, Independent Commission on Banking Capital adequacy requirements in different countries