June 29, 2018

The Board of the Finnish Financial Supervisory Authority (FIN-FSA) has decided to impose, on credit institutions, a structural additional capital requirement in the form of the systemic risk buffer. The buffer will strengthen the risk absorbency of credit institutions for structural systemic risks. It will be imposed on Nordea at a level of 3.0%, on Op Group at 2.0%, on Municipality Finance Plc at 1.5%, and on other Finnish credit institutions at 1.0%.

For Nordea, OP Group, and Municipality Finance Plc, the systemic risk buffer has been set higher than the others because their contribution to systemic risks is particularly large and their notional impact on the indicators examined as justification for a systemic risk buffer is substantial. Marja Nykänen, Chair of the Board of the FIN-FSA, says that the structural systemic risks are so high in the financial system in Finland that it is justified to impose a systemic risk buffer on all credit institutions.  In addition to the systemic risk buffer, the additional capital requirements for global (G-SII/B) and national (O-SII) systemically important credit institutions were reviewed.

The decision was made to identify Nordea as a global systemically important credit institution (G-SII/B) and to impose on Nordea an additional capital requirement of 1.0%. The decision complies with the recommendation of FSB. FIN-FSA has identified the systemically significant credit institution for Finland (O-SIIs) and has imposed on them additional capital requirements as follows: Nordea 2.0%, OP Group 2.0%, and Municipality Finance Plc 0.5%. Of the additional capital requirements imposed, only the highest (in this case the systemic risk buffer) are obligatory. Within the banking union, the level of the tsystemic risk buffer has currently been set at 3% at most, even though a number of credit institutions operating in the banking union are, overall, larger and, from the perspective of the financial stability of the whole banking union, more significant than Nordea.

 

Related Links

Keywords: Europe, Finland, Banking, Systemic Risk Buffer, G-SIB, O-SII, ESAs, FIN-FSA

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476