FIN-FSA Decides Not to Impose CCyB Requirement on Banks

By Regulatory News

March 22, 2019

Basel III, Regulatory Capital

FIN-FSA decided not to impose a countercyclical capital buffer (CCyB) requirement on credit institutions. In its meeting on March 22, 2019, the FIN-FSA Board also decided to maintain, unchanged, the loan cap imposed a year ago for residential mortgage loans, other than first-home loans.

This is because the primary risk indicator for imposing a CCyB requirement has remained clearly below its threshold value: the domestic private-sector credit-to-GDP gap was -7.1 percentage points at the end of September 2018. Moreover, other supplementary risk indicators are not signaling a build-up of financial system risks to necessitate an immediate increase in the CCyB requirement. According to Marja Nykänen, Chair of the FIN-FSA Board, one of the objectives of the FIN-FSA Board’s macro-prudential strategy is to ensure that the growth rate of household loans does not exceed the growth rate of household disposable income over the medium term. The application of macro-prudential instruments is aimed at achieving this goal.

Related Link: Press Release and Related Documents

Keywords: Europe, EU, Finland, Banking, CCyB, Regulatory Capital, Basel III, Macroprudential Policy, Credit Risk, FIN-FSA

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