Economic data coming out of Sweden still mostly good

Swedish central bank The Riksbank published its bi-annual Financial Stability Report this morning. The report concludes that despite the deteriorating economic outlook, Swedish banks are able to cope with the situation. Riksbanken expects limited loan losses and increasing earnings but notes that great uncertainty remains.

Swedish banks continue to have access for international capital markets, but some effect has been felt from more expensive long-term bonds. The central bank still recommends Swedish banks to maintain or increase capital ratios and feels that Swedish banks should have 12 per cent CET1 capital by 2015. Riksbanken has recently shifted from extreme vigilance to relatively dovish tone when it comes to the Repo rate.

According to Statistics Sweden, economy of Sweden grew at a faster than expected 4,6 clip year-on-year In Q3 of 2011 and 1.6 seasonally adjusted to Q2 of 2011. The headline growth number was down just a hair from a revised 4.7% y/y% number on Q2. Export growth was the main driver behind the advance. Economist had been expecting global slowdown to be more pronouncedly manifested already in Q3 report, and certainly don’t expect to see so strong numbers going forward.