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Risks can build up when the economy is strong

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The Swedish economy continues to be strong, and resilience in the financial system is satisfactory. However, a long period of low interest rates and strong growth has resulted in an elevated risk appetite, high asset prices and high debt. This makes the financial sector more sensitive to shocks, writes Finansinspektionen (FI) in the first Stability Report of the year, which is being presented today.

FI states that the global economy and the Swedish economy continue to demonstrate strong growth. Resilience in the European banking sector has improved as profitability rises and the share of non-performing loans continues to fall. There is therefore a lower risk that problems in the European banking sector could easily spread to Sweden, writes FI in the report.

The strong economic growth has also resulted in greater optimism, high asset prices and high debt. This increases sensitivity in both the financial system and the economy at large.

“The trend will break sooner or later, and we want to be ready. In order to reduce the after-effects of the problems that may arise in the future, FI is strengthening the resilience of households, banks and insurance companies,” says FI Director General Erik Thedéen.

Director General Erik Thedéen and Chief Economist Henrik Braconier will present the report at a press conference today.

Time and date: Tuesday, 29 May, 10:00 a.m.

Location: FI’s premises at Brunnsgatan 3, Stockholm.

The press conference is only for representatives from the media, but will be broadcast live on FI’s website, fi.se.

Regulator Information

Abbreviation: FI
Jurisdiction: Sweden

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