FRSGlobal : Risk Analysis and Regulatory Reporting

Regulators in Sweden

The supervisory and regulatory framework in Sweden consists of:

• Sveriges Riksbank
• Finansinspektionen (FI)

FRSGlobal in Sweden

As Sweden is a part of the European Union, the financial sector in Sweden is impacted by changes in the regulatory framework introduced in the EU. Despite the recent meltdown of the banking sector which adversely affected its financial sector, Sweden is now experiencing a relatively strong economic recovery and rapid growth.

As reported by the central bank of Sweden, the Swedish banking sector appears to be recovering with the reforms undertaken by national regulatory authorities and the EC. Also, Swedish banks appears to be well capitalised and in good shape as compared to many other EU countries.

Currently banks in Sweden have amongst the highest Tier 1 capital ratios in Europe. The Riksbank estimates that, by the end of 2011, they will have sufficient resources to meet the forthcoming Basel III capital requirements.

Regulatory Environment — Sweden

Statutory

Financial reporting (FINREP)
Sweden’s regulatory framework on balance sheet and income statement is based on IFRS. Financial institutions are required to submit consolidated balance sheet and income statements to Finansinspektionen, the Swedish FSA on quarterly basis based on the FINREP framework (financial reporting from the European Banking Authority). In addition, financial institutions are required to submit standard financial reports to the Swedish FSA on annual basis.

Prudential

Capital adequacy reporting (COREP)
Sweden has implemented the Basel II framework for their prudential risk assessment and reporting. Financial institutions shall periodically report information on capital adequacy to the FSA, through COREP (Common reporting framework from the European Banking Authority) on solo and consolidated basis. The frequency of submission of these reports is quarterly for credit institutions and monthly for investment firms with options to use either the standard approach or the internal rating based approach for their risk calculations.

Liquidity risk reporting
Financial institutions with total assets exceeding five billion are required to report liquidity risk in connection with capital adequacy rules effective from February 1, 2007. To provide a more comprehensive picture of the company's liquidity position, new regulations on reporting liquidity risk are expected to be implemented from July 1, 2011.

Interest risk reporting
To assess potential capital losses that might occur due to interest rate movements, financial institutions may submit quarterly reports on interest rate risk in non-trading activities to the Swedish FSA.

Large exposures reporting
All banks and investment firms are required to report exposures on large transactions along with capital adequacy reports to the Swedish FSA on periodic basis.

Statistical

Balance sheet statistics reporting
To assess the financial position of financial institutions, the Central bank of Sweden and the Swedish FSA collect data through various reports submitted on quarterly, monthly and annual basis. These statistical reports provide information of balance sheet broken-down by sector, maturities and counterpart-sector etc.

Transactional

MiFID reporting
Investment firms are obliged to report all transactions with financial instruments that are traded on a regulated market and an MTF (Multilateral Trading Facility) to the Swedish FSA on a regular basis. The authority collects these reports to monitor transparency in transactions and promote market integrity.

Suspicious Transaction reporting (STR)
To combat money laundering activities and terrorist financing, the Swedish FSA requires all financial institutions to submit these reports to the Financial Information Unit in case suspicious transactions are observed.