The Administrative Court sets aside the Swedish Financial Supervisory Authority’s Pillar 2 Guidance for Klarna

The Administrative Court sets aside the Swedish Financial Supervisory Authority’s (the “SFSA”) decision on Pillar 2 Guidance for Klarna Bank AB and sends the case back to the SFSA for a new assessment.

A Pillar 2 Guidance is a part of the capital adequacy regulations that Swedish banks are subject to. The SFSA is responsible for issuing such guidance. The Pillar 2 Guidance aims to ensure that banks have sufficient capital during a financial downturn.

On 30 September 2021 the SFSA notified Klarna of a Pillar 2 Guidance. Klarna appealed the SFSA’s decision to the Administrative Court in Stockholm and on 1 December 2022 the Administrative Court handed down its judgement in the case.

The Administrative Court ruled that the SFSA had not made a sufficient assessment of Klarna’s specific characteristics, and the extent to which these set Klarna apart from more traditional banks. The Administrative Court therefore set aside the SFSA’s decision and sent the case back to the SFSA for a new assessment.

Klarna Bank AB was represented by Mannheimer Swartling.