SWEDEN Law and Practice Contributed by: Richard Engblom, Per Josephson, Anna Cumzelius and Amin Bell, Harvest Advokatbyrå
8. Insolvency, Recovery and Resolution 8.1 Legal and Regulatory Framework Capital Requirements The capital requirements in Sweden are based on principles designed by the Basel Commit - tee, which have been implemented through the EU capital adequacy regulations, Swedish laws, and SFSA’s regulations. The principles contain minimum own funds requirements (Pillar 1), additional own funds requirements (Pillar 2), and combined buffer requirements. Pillar 1 Banks measure their risks and calculate mini - mum own funds requirements following the rules and calculation models set out in the EU Capital Requirements Regulation (575/2013/EU). The minimum own funds requirement is 8% of the value of the bank’s assets and other assump - tions adjusted for their risk, which is called the risk-weighted exposure amount (REA). The requirement is calculated for credit risks, market risks, and operational risks. Pillar 2 Banks must hold capital that adequately covers all risks to which they are or may be exposed. To ensure that a bank knows which risks it can be exposed to, there are rules set out in the Banking and Financing Business Act (2004:297) that require a bank to identify, measure, govern, internally report, and exercise control over the risks associated with the bank’s business. The banks must evaluate their capital need for non-Pillar 1 risks in what is called the Internal Capital Adequacy Assessment Process (ICAAP) and determine their total capital need. The SFSA conducts a supervisory review and evaluation
• the interests of the bank require disclosure; or • the disclosure is made with the express or implied consent of the customer. For example, the Swedish Parental Code (SFS 2008:913) contains provisions regarding the obligation of banks to provide information to the chief guardian. A bank is also obliged to disclose information regarding an individual’s relations with the bank where such information is requested by the investigating officer in the course of an investigation pursuant to the pro - visions regarding preliminary investigations in criminal actions, by the public prosecutor in a matter pertaining to legal assistance in criminal actions, on application by another country or an international court, or in a matter pertaining to recognition and execution of a European Infor - mation Order. Additional statutory obligations to provide infor - mation on individuals’ relationships with banks include, inter alia: • suspicion of money laundering or terrorist financing; • market abuse or other crimes; • bankruptcy proceedings; • a request by another state or international court; • a European arrest warrant; or • a request from the SFSA, the Swedish Tax Agency or the Swedish Enforcement Author - ity. Violation of bank secrecy is, depending on the relevant circumstances, punished by:
• public sanctions; • criminal sanctions; • civil sanctions; or • disciplinary sanctions.
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