Nordic banks’ RWAs rise $9bn on Swedish risk-weight floor rejig
Constraints on real-estate exposure modelling result in Pillar 2 charges moving to Pillar 1 requirements
Banks in Sweden had to change the way they capitalise commercial mortgages in the third quarter, a prudential rejig that is part of a wider push to curb loose risk-weighting in red-hot lending spaces.
Swedish banking regulator Finansinspektionen has, since 2020, imposed a floor on the risk weights for banks’ commercial real estate exposures, by adding a top-up to modelled risk weights in the form of extra Pillar 2 capital requirements. As of September 30, charges stemming from the floor moved
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