Featured Product

    FIN-FSA Outlines Focus Areas and Publishes Annual Report for 2019

    March 16, 2020

    FIN-FSA published the annual report for 2019, highlighting digitalization, climate change, and anti-money laundering as special issues in its activities. These are also prominent objectives in the FIN-FSA strategy for 2020–2022, which was updated during the review year. As an Annex to the annual report, FIN-FSA also published the list of entities it supervises.

    In the Director's review section, the FIN-FSA Director Anneli Tuominen highlighted that a supervisor must understand not only the benefits of digitalization for the business but also the risks associated with digitalization, whether it uses data and artificial intelligence applications or addresses cyber risks. She also mentioned that, from the point of view of financial stability, it is important to consider the impact of climate change and climate policy on supervised persons' risk in assessing the activities of supervised entities. In its work as a supervisor, FIN-FSA is also involved in determining which investments can be considered green. It is also important that green investment is not promoted by easing the capital requirements of operators, as capital requirements must continue to be risk-based. All in all, the impact of climate change on the risk management and risk taking of the supervised entities is significant.

    Ms. Tuominen also highlighted that the insurance sector is currently assessing the impact of the Solvency II regulatory reform on the supervised area. In particular, the discount rate assumption used in the capital adequacy calculations requires modernization, as the discount rate is currently too high compared to market rates. This means that companies' technical provisions have been underestimated, especially for long-term liabilities. Similarly, the treatment of interest rate risk in the capital adequacy calculation should be corrected to take into account the current interest rate environment. If the goal is not to increase regulatory requirements, then it should be carefully evaluated what parameters and how to adjust the Solvency II calculations to achieve equilibrium. It is important that regulation is as risk-based as possible and that it promotes the principle of proportionality. Also, FIN-FSA published a supervised release on the management of disability risk allowed to pension insurance companies. This is important because companies were slipping past their authorized industry—that is, social insurance—in providing well-being services. FIN-FSA will continue to audit this matter this year to ensure that all companies operate within the regulatory framework.

     

    Related Links

    Keywords: Europe, Finland, Banking, Pensions, Climate Change Risk, AML/CFT, ESG, Capital Requirements, Basel III, Solvency II, Annual Report, Fintech, FIN-FSA

    Featured Experts
    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    EP Reaches Agreement on Corporate Sustainability Reporting Directive

    The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).

    June 21, 2022 WebPage Regulatory News
    News

    PRA Consults on Model Risk Management Principles for Banks

    The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.

    June 21, 2022 WebPage Regulatory News
    News

    EC Regulation Amends Standards for Calculating Credit Risk Adjustments

    The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    BIS Bulletins Discuss DeFi Lending and Aspects of Crypto-Assets

    The Bank for International Settlements (BIS) published bulletins on lending in decentralized finance (DeFi) system, on blockchain scalability and fragmentation of crypto, and on extractable value and market manipulation in crypto and decentralized finance.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8293