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    FIN-FSA Amends Regulations and Guidelines on Credit Risk Management

    January 27, 2020

    FIN-FSA issued amended regulations and guidelines 4/2018 on management of credit risk by supervised entities in the financial sector. The regulations and guidelines will enter into force on February 10, 2020.

    The key changes to regulations and guidelines 4/2018 include the following:

    • Addition of EBA Guidelines of October 30, 2018 on the management of non-performing and forborne exposures to the regulations and guidelines
    • As applicable and subject to requisite additions and revisions, addition of the contents of the letter “To banks operating in Finland on Safeguarding banks’ long-term profitability and customer protection” and contents of the supervision release “20/2010—June 08, 2010: Supervisory release of household housing finance”
    • Clarification of lending practices related to housing company credit

    The objective of these regulations and guidelines on the management of credit risk is to ensure that supervised entities and entities belonging to the same consolidation group do not take on credit risks that may jeopardize their profitability or capital adequacy, in the course of their lending or investment activities. In addition, the regulations and guidelines aim to ensure that entities have adequate and effective functions in place, commensurate with the nature and scope of their activities, to identify, measure, mitigate, monitor, and control market risk as part of their overall business risk management and control.


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    Effective Date: February 10, 2020

    Keywords: Europe, Finland, Banking, Credit Risk, Credit Risk Management, Capital Adequacy, NPLs, FIN-FSA

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