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Swedish FSA says financial stability better, but geopolitical risks weigh



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Adds FSA comment from paragraph 2

STOCKHOLM, Nov 20 (Reuters) - Sweden's financialstability hasimproved in the last six months, but the economy is weakand there is more uncertainty about developments in the global economy and political situation, the Swedish banking watchdog said on Wednesday.

Sweden'seconomy has shrunk two quarters in a row and the FSA said it expected a slow recovery while there were risks of reversals.

"The risk is that a worse geopolitical situation leads to negative effects for global trade and energy prices," FSA Director General Daniel Barr said in a regular report.

The geopolitical situation also increases the risk that the financial system could be targeted, the FSA said.

"Those attacks could happen in different ways, for example in the form of cyber attacks, disinformation, infiltration or sabotage," Barr said.



Reporting by Simon Johnson, editing by Louise Rasmussen

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