Sweden: Financial Sector Assessment Program–Technical Note on Basel Core Principles for Effective Banking Supervision

International Monetary Fund

No 2023/139, IMF Staff Country Reports from International Monetary Fund

Abstract: The paper highlights a technical note on Basel Core Principles (BCP) for Effective Banking Supervision for the Sweden financial sector assessment program. The authorities have adopted a number of regulatory reforms to enhance the resilience of the Swedish financial system. The key changes to the legal framework for banks and banking supervision in Sweden have mainly been a direct result of legal initiatives at European Union level. The supervisory framework for banks and its implementation in Sweden is broadly in line with a number of the BCP essential criteria. However, several gaps should be addressed, to enhance the effectiveness of banking supervision in Sweden and to contribute toward ensuring a safe financial system. Most of the shortcomings that have been identified are attributable to gaps in the legal or regulatory frameworks and to significant resource constraints within the banking supervision function at Financial Supervisory Authority (FI). Sweden has a relatively efficient supervisory framework that has evolved over the years, but which requires enhancements to align with best practice. FI’s supervision follows a risk-based approach, where most of its resources are devoted to the largest institutions and significant branches in Sweden. The principle of disclosure and transparency is well established in the Swedish context.

Keywords: Sweden FSAP; financing business act; Risk mitigation program; due diligence; FI's regulation; securities commission; Tier 1; Credit risk; Credit; Market risk; Operational risk; Stress testing; Baltics; Europe; Global (search for similar items in EconPapers)
Pages: 283
Date: 2023-04-20
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