FI leaves the countercyclical buffer rate unchanged

The Swedish financial supervisory authority, Finansinspektionen (FI) has published a press release to announce its decision to leave the countercyclical buffer rate unchanged.
Based on the Capital Buffer Act (2014:966) which requires FI to quarterly review the buffer rate and amend it as needed, the regulator has determined that the countercyclical buffer of 2% which will applies since June 22, 2023 currently seems adequate for the remainder of 2023. The buffer guide has been calculated at 0%.
The key objective of the countercyclical buffer rate is to maintain and strengthen banks‘ resilience. Lowering or increasing the countercyclical buffer frees up or tightens banks‘ capital, thereby increasing or decreasing institutions‘ lending abilities and thus supporting economic activity in the country.