Thu. Sep 28th, 2023

Washington, D.C., 1 February 2023

Country Report No. 2023/064 : Finland: Financial Sector Assessment Program-Technical Note on Non-Bank Financial Intermediation and Pension Insurance Companies

This note evaluates non-bank financial institutions (NBFI) as a sector in Finland, with a special focus on the pension insurance companies (PIC). The analysis was undertaken against the backdrop of the war in Ukraine, the energy crisis, and rising central bank interest rates in the face of a sustained inflationary surge and the aftermath of the COVID-19 pandemic.


Country Report No. 2023/065 : Finland: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions

The Financial Sector Assessment Program (FSAP) conducted a focused review that primarily assessed banking regulation and supervision of Finland’s less significant institutions (LSIs).1 LSIs account for around 16 percent of Finland’s banking sector and the regulation and supervision of the rest of the banking sector takes place within the European Central Bank’s (ECB) Single Supervisory Mechanism (SSM). The Finnish Financial Supervisory Authority (FIN-FSA) is under the oversight of the ECB, responsible for the supervision of LSIs.


Country Report No. 2023/062 : Finland: Financial Sector Assessment Program-Technical Note on Crisis Management and Resolution

The Finnish financial safety net and crisis management arrangements rest on sound statutory foundations. As Finland is part of the Euro Area framework, the resolvability of Significant (SIs) and Less Significant (LSIs) Finnish institutions have improved their compliance with the European Union’s variant of the Financial Stability Board’s loss-absorbing capacity requirements, known as Minimum Requirement for Own Funds and Eligible Liabilities (“MREL”). At a national level, the Finnish authorities have also improved internal and inter-authority crisis preparedness. Reflecting the interconnectedness in the Nordic-Baltic region, in 2018, the Finnish authorities also signed an updated MoU with Nordic-Baltic authorities focused on improving coordination with respect to managing crises in the regional financial system. However, there is still room for improvement in key areas, including LSI resolvability, operational readiness to implement resolution actions, central bank crisis liquidity support arrangements and interagency crisis preparedness.


Country Report No. 2023/061 : Finland: Financial Sector Assessment Program-Technical Note on Systemic Risk Analysis and Stress Testing

Finland is a small open economy that is significantly exposed to global financial and economic conditions. Following the Global Financial Crisis (GFC), Finland entered a long recession led by the decline of its information and communications technology (ICT) sector. With the implementation of some structural reforms, Finland’s competitiveness improved, as did growth and employment, albeit at a lower rate of growth. The economy was less significantly affected by the COVID-19 pandemic relative to other economies, thanks to its low exposure to service-intensive economic sectors, fiscal policy, and other interventions. However, Finland is now navigating a weaker economic outlook given the war in Ukraine, despite limited direct exposures to Russia.


Country Report No. 2023/063 : Finland: Financial Sector Assessment Program-Technical Note on Macroprudential Policy Framework and Tools

Since the 2016 FSAP, the Finnish authorities have made steady progress in improving the country’s macroprudential policy framework. The authorities have expanded the macroprudential policy toolkit by introducing a systemic risk buffer (SyRB) and a minimum risk weight for mortgage loans. They have also begun developing a positive credit register to record individual borrower data. These granular data will help the authorities to analyze household indebtedness and calibrate macroprudential tools to appropriately target specific vulnerabilities. In addition, cooperation arrangements with other Nordic countries have been expanded by signing an updated Memorandum of Understanding (MoU) to promote financial stability, including by establishing common procedures for information sharing and coordination.


Source – IMF – Email


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