STOCKHOLM (Reuters) - Sweden's financial watchdog has accused the central bank of meddling in its affairs after the Riksbank asked the country's major banks to change their currency buffers, a letter seen by Reuters showed on Friday.
The two have diverged since the government gave the Financial Supervisory Authority responsibility over macro prudential regulation in 2013, with the central bank saying rules on bank capital and measures to stop growth in household debt are too lax.
In its Feb. 16 letter to the Riksbank, the FSA expressed concern over a letter the central bank had sent to the four Swedish major banks on Jan. 18 asking them to show how they would improve liquidity handling in Swedish crowns.
In the latest letter, which Reuters has seen following a report from daily Svenska Dagbladet, the FSA asked the Riksbank to stay away from its jurisdiction.
The central bank's First Deputy Governor Kerstin af Jochnick told Svenska Dagbladet that the Riksbank had invited FSA head Erik Thedeen to talks to discuss the matter.
The financial watchdog's stance is that it is up to the banks themselves to decide how large the crown share of their liquidity buffers should be.
In the February letter to the Riksbank's six board members, Thedeen wrote that the FSA would welcome a discussion.
"The need for a public discussion does not mean however that I find it appropriate that the Riksbank is turning to individual banks with recommendations that deviate from the rules that apply," Thedeen wrote.
Sweden's four major banks are SEB (ST:SEBa), Nordea (ST:NDA), Swedbank (ST:SWEDa) and Handelsbanken (ST:SHBa).
Reuters could not immediately obtain the central bank's letter to the four banks.