Swedish Central Bank said on Wednesday that household indebtedness is currently the greatest domestic risk in Sweden.
According to a Bank's press release, household indebtedness in Sweden continues to increase from an already high level, which "poses risks to the stability of the financial system and of the real economy."
Overall, the Bank said, the Swedish financial system is working well at present. However, it stressed that, "vulnerabilities in the financial system mean that shocks in Sweden and abroad may have a negative impact on financial stability. "
Measures aimed to boost the resilience of the banks and to reduce the risks associated with indebtedness have been implemented. Meanwhile, the Central Bank also recommended "that the countercyclical buffer be activated as soon as possible and set at 2.5 per cent, that a liquidity buffer requirement in Swedish kronor be introduced and that sound minimum levels be introduced in the discretionary income calculations used in the banks' credit assessments."