SWEDEN – Finansinspektion (FI), the Swedish financial supervisory authority, has asked for an increase of almost 25% into its annual budget in the next three years, after an annual review. The authority wants an extra SEK30m (e 3.3m) on top of its SEK130m annual budget to cope with new international risk supervision regulation, set by the Bank of International Settlement’s (BIS) Basel accord.
The proposal given to the government suggests FI will have to double its operations on risk analysis and method development. "We will need to recruit experts on credit risk, corporational risk, risk experts of different types who would work, either on supervision in-house or on approval of internal measurement systems in the way the Basel proposal suggests for credit institutions," says Claes Norgren, general director of FI.
Even though new staff is an important part of the budget proposal, Norgren says external consultancy takes the lion’s share: "The new SEK30m increase would be in favour of external expertise rather than in-house staff."
Rough estimates by the financial authority suggest it needs an extra 36 new workers in the next three years to facilitate the broader supervision of financial companies. "We estimate that this is not a problem for big banks but for a rather large number of other credit institutions. Some of the staff will be looking into authorising the new internal ratings system, which is the kind of thing we have been doing already in the area of market risk but the new area is broader," says Norgren.
Apart from financial experts, the authority needs those who provide legal implementation for the institutions. " Our assumption is that there will be a greater need for guidance by the supervisors in the area than before," adds Norgren.
The activities of Swedish financial services groups outside the country and in co-operation with other Nordic groups have also caused extra measures to be implemented in all of the Scandinavian countries. The countries seem to be taking steps towards more comprehensive financial supervision simultaneously but at a varying pace.
Says Norgren: "We have submitted this to our Nordic colleagues, to get their appraisal of our document. In general terms, on analysis and the operating system. They have been favourable of it, and the Norwegian supervisors have done a similar analysis a year ago already."