By Jason Douglas

LONDON--Banks aren't properly recognizing the risk of losses on their mortgage books, the head of Sweden's central bank and chairman of the Basel Committee on banking supervision said Tuesday.

Riksbank Governor Stefan Ingves said, "risk weights" used by banks to calculate the amount of capital they need to hold against losses on mortgages are too low.

"In my view, risk weights, and particularly risk weights for mortgages, need to go up," Mr. Ingves said in a lecture to the Official Monetary and Financial Institutions Forum in London.

Mr. Ingves's remarks imply banks aren't holding enough capital to cover potential losses on bad home loans, and may signal a tougher stance from regulators on how banks calculate risk in their portfolios and subsequently their capital needs.

He said a big chunk of most nations' private sector debts are home loans yet the risk associated with potential losses is minimal.

"In my view that's not sustainable," he said.

The bulk of Mr. Ingves's speech focused on lessons for policy makers from Sweden's banking crisis in the 1990s. He said it is important banks' bad loans are recognized and losses imposed. He also stressed the importance of international cooperation in tackling financial crises.

Write to Jason Douglas at jason.douglas@dowjones.com