The agency changed its assessment from "negative" to "stable", a week after another key ratings agency, Standard & Poors, downgraded its assessment of Sweden's banking system.
Moody's based its more optimistic view partly on Swedes' keeping up with interest rate payments on their mortgages.
“Problem loan levels remain well below those of other systems,” Moody's said in a statement.
“We expect loan-repayment capabilities will continue to be supported by low interest rates and households' resilient financial profiles.”
Moody's predicts that GDP growth will slow down, but remain stronger than growth in many of Sweden's European neighbours.
Sweden still appears relatively unscathed despite its trade ties with the continent.
"While Sweden's relatively open economy is not fully immune to the ongoing downturn in the European economy... the Swedish economy has out-performed most euro area economies, partly insulating Swedish banks from the ongoing euro area debt crisis," Moody's noted.
However, Moody's also highlighted Swedish banks' reliance on market funding as "key system vulnerability", explaining that it renders them "vulnerable to swings in investor and market sentiment".
Moody's revised rating comes the same day that Sweden's Financial Inspectorate (Finansinspektionen, FI) proposed tripling the reserves banks must set aside to protect against losses from mortgage defaults.
"The forthcoming requirements will bring about a more stable financial system which will in turn generate positive effects on the economy," the agency wrote in a statement.
FI also signalled its intent to introduce a risk weight floor of 15 percent for Swedish mortgages as a part of the agency's overall capital assessment of firms within the so-called Pillar 2 of the Basel II banking accords.