Q&A: Finansinspektionen's Uldis Cerps on capital floors and too-big-to-fail

It will be difficult for regulators to calibrate a proposed new system of capital floors: too high, and banks may be encouraged to take more risk; too low, and they may fly into trouble. Uldis Cerps, executive director of banking at Sweden’s Finansinspektionen, talks about the need for balance

Uldis Cerps, Finansinspektionen: "calibration needs to be very careful"

At first glance, Swedish bank supervision in the post-crisis years might appear contradictory – the country's central bank and its prudential supervisor, Finansinspektionen, have sought to control mortgage risk through a variety of mechanical means, sidelining banks' risk-weighted asset (RWA) calculations. But the supervisor has also consistently spoken up for risk-sensitive capital requirements, and Uldis Cerps, Stockholm-based executive director of banking supervision, does so again in this