–Says Major Banks Are Well Capitalised
BRUSSELS (MNI) – Sweden’s major banks are well capitalised, but
there are still large risks and uncertainty has increased recently, the
Riksbank said on Tuesday in its financial stability report.
“Swedish banks have only small exposures to the southern European
countries experiencing problems with their public finances,” Riksbank
Governor Stefan Ingves said in a statement. accompanying the report.
“The Swedish banks are also well-capitalised, seen from an international
perspective, and have since the winter been able to return to normal
funding without state support.”
The report noted that, “following a period of increasing stability,
the financial markets have once again suffered considerable uncertainty
as a result of the concerns regarding public finances in several
countries in southern Europe.”
The Riksbank report outlined a number of risks to its banking
outlook including the possibility that “fiscal consolidation in
countries with public finance problems may suffer setbacks.”
“This could lead to a wave of renewed uncertainty and to
deterioration in the functioning of the markets,” the financial
stability report said.
A second risk is that the recovery underway in the Baltic region –
where many Swedish banks have large chunks of their business – could
come to a halt, the report said. That “could lead to increased loan
losses for the banks,” the report said.
Despite these risks, the major banks are “well-capitalised in an
international comparison, and loan losses are expected to be lower in
the coming period,” the Riksbank said.
It said loan losses during the period 2010-2012 will be lower than
was assumed in its last report, published in November.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
[TOPICS: MT$$$$,M$$FX$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]
