Swedish Banks Forced to Review Risk Models After ECB Probe

The European Central Bank has identified significant deficiencies in risk models of top Swedish lenders SEB AB and Swedbank AB for their operations in Baltic countries, according to people familiar with the matter.

The banks have committed to short- and longer-term measures to address the issues, said the people, who asked to remain anonymous as the interactions were private. Both lenders have previously said that they are working on updating their wider risk models, which are used to determine banks’ capital requirements.