Swedish Financial Supervisory Authority gives Länsförsäkringar green light for Basel II

Länsförsäkringar Bank AB will calculate capital adequacy for credit risks in accordance with the IRB method. This will permissible following the Swedish Financial Supervisory Authority’s approval of the method on December 18. This applies on condition that the law is enacted as expected.

“This will further sharpen our competitiveness and provide us with even better tools in our credit risk assessment process. As a result of this decision, we can continue to offer our customers really good terms and prices, which will add even more impetus to our ability to challenge,” says Tomas Johansson, President, Länsförsäkringar Bank.

As of 2007, the new Basel rules, known as Basel II, will come into effect in Sweden and other EU countries, via EC directives. This will result in changes for the credit institutions, securities companies and certain fund companies that are subject to the new regulations. It will also entail an increased need of financial supervision, particularly in terms of cooperation between the EU’s supervisory authorities.

The main aim of the new regulations is to achieve increased transparency among companies and to sharpen the efficiency of their risk management, and thus to increase stability in the financial system.

“This is when the real work starts. We have decided to opt for the advanced internal based rating approach, because this provides us with the greatest opportunities for managing credit risks strategically and operationally. I foresee major benefits, since we have become even better at identifying, measuring and managing risks. In addition, the business processes have become much better,” Tomas Johansson adds.


For further information, please contact:

Tomas Johansson,
President, Länsförsäkringar Bank AB
+46-8-588 419 82
+46-73-96 419 82

Dag Rosander,
Press Officer, Länsförsäkringar AB
+46-8-588 414 99
+46-73-96 414 99