Thedéen backs simpler bank rules without lower capital buffers
Riksbank Governor Erik Thedéen called for simpler banking regulation without reducing capital or liquidity buffers. Speaking at Finance Sweden's banking conference in Stockholm, he urged compliance with global minimum standards.
Less complexity, same resilience
Thedéen urged reforms to make banking regulation more transparent and effective while preserving resilience.
He welcomed international discussions on simplification, pointing to parallel capital requirements and advocating greater emphasis on core Tier 1 capital.
Simplification must not lower capital levels or liquidity buffers.
He said all countries, including the EU, must comply with global minimum standards because financial stability is a global asset.
Higher capital and liquidity requirements under Basel III helped banks continue lending to households and companies during the pandemic, unlike during the financial crisis.
He warned against forgetting these benefits as memories of the crisis fade.
New risks meet lower inflation
Growing non-bank financial institutions (NBFIs) and artificial intelligence make future risks harder to assess, Thedéen said.
He urged continued transition to transaction-based reference rates such as SWESTR to strengthen confidence and keep Sweden in line with international standards.
October flash CPI was well below the September forecast, but monthly readings vary.
Before its next decision in mid-December, the Riksbank will receive another inflation reading and information on Swedish and overseas developments to assess inflation and activity.
Simplification is not deregulation
Thedéen separates simpler rules from weaker safeguards.
His case rests on banks maintaining lending under stress, not on reducing their buffers.
The lower October inflation reading remains one input into December's decision, alongside further domestic and international data.