FI Issues Regulatory Updates for Banks and Investment Firms
The Swedish Financial Supervisory Authority (FI) has updated validation rules for reporting according to the EBA taxonomy via the new reporting system Fidac. Also updated was the list of deactivated EBA validation rules for periodic reporting via Fidac for banks and investment firms. FI has decided to reciprocate the decision of the Norwegian Ministry of Finance to implement an average risk-weight floor of 20% for retail exposures and of 35% for corporate exposures collateralized by real estate in Norway; the decision shall apply from September 30, 2021 until December 31, 2022.
The decision is applicable for Swedish credit institutions that have branches or other exposures in Norway and are authorized to use an internal ratings-based approach for the calculation of their capital requirement for credit risks. FI will apply the threshold of NOK 32.3 billion for retail exposures collateralized by real estate and NOK 6.7 billion for corporate exposures collateralized by real estate, as stated by the Norwegian Ministry of Finance. Given the measures being decided now, the existing Pillar 2 add-on for Norwegian mortgages that was previously communicated in a memorandum will no longer be applied by FI as of September 30, 2021. FI is postponing its decision on reciprocating the Norwegian systemic risk buffer of 4.5% for Norwegian exposures until more information is available on how the fifth Capital Requirements Directive (CRD5) will be implemented in Norway.
Finally, FI issued a statement on classification of small and non-complex institutions. The amendments to the Capital Requirements Regulation (CRR) that certain credit institutions and securities companies may be classified as small and non-complex institutions came into effect on June 28, 2021. A company that wants to be classified as a small and non-complex institution must submit a report to FI, wherein the company must state how it fulfills the required conditions in CRR. FI may make a different assessment of the classification if an analysis of the size, connections, complexity. or risk profile shows that the company cannot be considered as such an institution. A small and non-complex institution may be authorized to apply a simplified calculation of the net stable funding ratio (NSFR). An undertaking wishing to apply simplified NSFR is required to submit a separate application for authorization under Article 428a of CRR. It is the company's responsibility to continuously ensure that it meets the conditions for classification as a small and non-complex institution. The company must inform FI if it no longer meets these conditions.
Related Links (in Swedish)
- News Release on Validation Rules
- Validation Rules for Banks
- Validation Rules for Investment Firms
- News Release on Size Classification
- News Release on Risk-Weight Floor (in English)
- Decision on Risk-Weight Floor (in English)
Effective Date: September 30, 2021 (Risk-Weight Decision)
Keywords: Europe, Sweden, Banking, Securities, Investment Firms, Reporting, Validation Rules, FIDAC, Norway, Risk Weight Floor, Internal Ratings Based Approach, Regulatory Capital, CRR, CRD5, Basel, Small Banks, NSFR, Proportionality, FI
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Nick Jessop
Scenario modeling expert; risk management specialist; quantitative financial modeler
Related Articles
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
NGFS Report Explores Quantification of Climate Risk Differentials
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
EC Publishes Results on Review of Web Accessibility Directive
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
MAS Consults on Adjustment Spreads for Conversion of SOR Contracts
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
