FIN-FSA Supports COVID-19 Relief Measures of EBA and ECB for Banks

ECB and EBA, on March 12, 2020, had decided on several measures to facilitate lending by banks. ECB announced measures that provide the directly supervised (by ECB) banks with flexibility in the fulfillment of certain additional capital and liquidity requirements. These measures aim to support banks in addressing market uncertainty related to the COVID-19 and in continuing to fulfill their role in funding the real economy. Of the credit institutions operating in Finland, the entities directly supervised by ECB are Nordea Bank Abp, OP Financial Group, and Municipality Finance Plc. FIN-FSA points out that the own funds that Finnish banks under the direct supervision of ECB or FIN-FSA can use to fulfill the Pillar 2 additional capital requirement are, however, provided by law. The other measures provided by ECB are also available to banks directly supervised by the FIN-FSA, if necessary. 

In addition, EBA wants to let banks to focus on and ensure continuity of their core operations and has decided to postpone the EU-wide stress test exercise until 2021. In line with this decision by EBA, FIN-FSA has also decided to postpone to 2021 the stress test exercise for banks under its direct supervision. Additionally, FIN-FSA has taken contingency measures in view of the corona virus to ensure the safety and well-being of staff members and the continuity of the FIN-FSA operations. FIN-FSA is also closely monitoring the situation on the financial markets and in supervised entities in cooperation with other Finnish authorities and European supervisors. The corona virus situation at the FIN-FSA is being monitored and procedures coordinated in a joint group together with the Bank of Finland. 

Related Links

• Press Release, March 16, 2020
• Press Release, March 13, 2020
• Press Release on Contingency Measures

Keywords: Europe, EU, Finland, Banking, Stress Testing, COVID 19, Capital Requirements, Liquidity Requirements, Pillar 2, ECB, EBA, FIN-FSA