Finland: Financial Sector Assessment Program: Technical Note-Banking Supervision
IMF Staff Country Reports, January 11, 2017
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- Finland: Financial Sector Assessment Program: Technical Note-Banking Supervision
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Bibliographic details
- Published: January 11, 2017
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781475564747.002
Overview and purpose
- Publication date: January 11, 2017
- Pages: 57
- Volume: 2017
- Issue: 003
- Series: Country Report No. 2017/003
- DOI: https://doi.org/10.5089/9781475564747.002
- Stock No: 1FINEA2017001
- ISBN: 9781475564747
- ISSN: 1934-7685
- This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program (FSAP) for Finland in the area of banking supervision.
Key findings on liquidity and funding risk
- The regulatory and supervisory framework for liquidity and funding risk has improved since the last FSAP.
- Certain vulnerabilities persist and require greater attention.
- Finnish banks continue to rely extensively on wholesale funding, as noted in the 2010 FSAP.
- Many banks remain heavily exposed to the risk of a dry-up of unsecured wholesale funding despite supervisory efforts to mitigate the problem.
- Banks hold covered bonds issued by other banks as part of their liquidity buffer.
Supervisory actions and assessments
- Supervisory action has managed to mitigate the wholesale funding problem to some extent, but significant exposure remains.
- The note evaluates aspects of the FIN-FSA in relation to bank supervision, including references to FIN-FSA approach, FIN-FSA budget, FIN-FSA independence, FIN-FSA report, FIN-FSA resource, FIN-FSA staff, FIN-FSA standard, FIN-FSA's Board, and the supervisor-bank dialogue.
Risks and vulnerabilities highlighted
- Continued extensive reliance on wholesale funding creates material exposure to market disruptions (a potential dry-up of unsecured wholesale funding).
- Use of covered bonds from other banks in liquidity buffers presents interconnectedness and credit risk considerations.
Thematic subjects and keywords covered
- Subjects: Bank supervision, Banking, Covered bonds, Credit risk, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Financial stability assessment, Liquidity requirements, Loans
- Keywords: Bank supervision, Covered bonds, CR, credit risk, Credit risk, Europe, FIN-FSA approach, FIN-FSA budget, FIN-FSA independence, FIN-FSA report, FIN-FSA resource, FIN-FSA staff, FIN-FSA standard, FIN-FSA's Board, Financial stability assessment, Global, ISCR, Loans, Reinforce FIN-FSA independence, supervisor-bank dialogue
International Monetary Fund. Monetary and Capital Markets Department "Finland: Financial Sector Assessment Program: Technical Note-Banking Supervision", IMF Staff Country Reports 2017, 003 (2017).
Content in this bundle
- Country Report