SFSA Mandates Changes to SEB's Internal Risk Models
The Swedish Financial Supervisory Authority (SFSA) has issued a decision following a review of SEB's internal risk models. The ruling is expected to temporarily reduce SEB's capital buffer by 120 basis points.
The Swedish Financial Supervisory Authority (SFSA) has released its decision regarding a supervisory review of SEB's Internal Ratings-Based (IRB) models. The outcome is anticipated to temporarily impact SEB’s capital buffer negatively by 120 basis points. This impact stems from an expected increase in risk-weighted assets (RWA) of approximately SEK 150 billion.
The temporary rise in RWA is scheduled for implementation by December 31, 2026, and is expected to remain in effect until the necessary model approvals are granted. SEB has stated it will now analyze the decision.
The SFSA's ruling comprises two components. The first addresses a methodological adjustment, the specifics of which have been previously disclosed. SEB indicated that further details regarding the implications of this decision and subsequent actions will be provided once its analysis is complete.