The countercyclical capital buffer

The countercyclical capital buffer aims to increase the banks’ resilience to systemic risks. The countercyclical capital buffer is the clearest example of a capital requirement that is explicitly designed to vary over time. In the event of a crisis, the buffer requirement can be reduced, or set to zero. This increases the headroom down to the binding capital requirements, thereby freeing up capital that banks can use to both manage losses and support lending to households and companies. In this way, it can help to slow down an economic downturn.

The Riksdag (the Swedish Parliament) has decided that the Riksbank will take over responsibility for the countercyclical capital buffer from Finansinspektionen (the Swedish Financial Supervisory Authority). This means that the Riksbank sets the countercyclical buffer rate every quarter from 1 April 2026. The Riksbank shall also calculate a countercyclical buffer guide for each quarter. The Riksbank shall also cooperate with Finansinspektionen, which means that Finansinspektionen shall be given the opportunity to comment before the Riksbank makes a decision on the buffer rate.

The buffer rate shall reflect the Riksbank's assessment of the build-up of systemic risks in the Swedish financial system. The buffer rate is normally between 0 and 2.5 per cent. As of March 2021, the starting point in Sweden is that the buffer rate in normal times should be 2 per cent, which is considered its positive neutral level. This means that the buffer rate can be positive even in the absence of clear signs of growing systemic risk. If necessary, when the build-up of systemic risks is deemed to be particularly high, the buffer rate can be set above 2.5 per cent. 

The size of a bank’s countercyclical capital buffer is calculated on the basis of the countercyclical buffer rates applicable to the countries in which the bank has exposures. The Swedish countercyclical buffer rate applies to all banks’ credit exposures in Sweden and is subject to automatic reciprocity up to 2.5 per cent. This means that foreign banks with exposures in Sweden must also apply the Swedish countercyclical buffer rate for these exposures. Similarly, Swedish banks must apply the countercyclical buffer rates that apply in other countries for their exposures there. The Swedish countercyclical buffer rate forms the basis for the institution-specific buffer rates that Finansinspektionen monitors as part of its supervision.

The Riksbank makes its first decision in the latter part of the second quarter of 2026

The buffer rate of 2 per cent, which has been in effect since 23 March 2023, and which Finansinspektionen (FI) last reviewed on 18 March 2026, will remain in effect until the Riksbank makes its first decision in the latter part of the second quarter of 2026.