FIN-FSA Supports COVID-19 Relief Measures of EBA and ECB for Banks
FIN-FSA confirms, in line with the decisions taken by ECB, that banks are temporarily exempt from fulfilling certain additional capital and liquidity requirements, in response to coronavirus (COVID-19) pandemic. This will enhance the ability of credit institutions to provide funding to non-financial corporations and households and will alleviate the negative economic effects of the pandemic. The FIN-FSA Board has started work on an immediate review of the level of capital requirements that are subject to national decision-making. FIN-FSA continues to monitor the situation and banks’ contingency measures to address possible effects of the coronavirus on the domestic banking sector.
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
Keywords: Europe, EU, Finland, Banking, Stress Testing, COVID 19, Capital Requirements, Liquidity Requirements, Pillar 2, ECB, EBA, FIN-FSA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Metin Epözdemir
Metin Epözdemir helps European and African banks with design and implementation of credit risk, stress testing, capital management, and credit loss accounting solutions.
Emil Lopez
Credit risk modeling advisor; IFRS 9 researcher; data quality and risk reporting manager
Previous Article
FIN-FSA Outlines Focus Areas and Publishes Annual Report for 2019Related Articles
APRA Publishes Results of Climate Risk Self-Assessment Survey
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
ACPR Publishes Updates Related to CRD IV and Covered Bonds
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
EIOPA Publishes Guidance on Climate Change Scenarios in ORSA
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
EBA and ECB Respond to Proposals on Sustainability Disclosures
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
EBA Publishes Multiple Regulatory Updates for Regulated Entities
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
EESC Opines on Proposals on CRR and European Single Access Point
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury Publishes Multiple Regulatory Updates in July 2022
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.
