## Finland: Financial Sector Assessment Program-Technical Note on Non-Bank Financial Intermediation and Pension Insurance Companies

_IMF Staff Country Reports, February 1, 2023_

## Source details

**Canonical URL:** [Finland: Financial Sector Assessment Program-Technical Note on Non-Bank Financial Intermediation and Pension Insurance Companies](https://www.imf.org/en/publications/cr/issues/2023/01/31/finland-financial-sector-assessment-program-technical-note-on-non-bank-financial-528770)

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## Bibliographic details
- Published: February 1, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400229893.002

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### Executive summary and sector scope
- This technical note evaluates non-bank financial institutions (NBFI) as a sector in Finland, with a special focus on the pension insurance companies (PIC).
- Pensions, including the PICs and fund managers, are the most significant parts of the NBFI sector, followed by insurance.
- Publication metadata:
  - Date: February 1, 2023
  - Pages: 40
  - Volume: 2023
  - Issue: 064
  - Series: Country Report No. 2023/064
  - DOI: https://doi.org/10.5089/9798400229893.002
  - ISBN: 9798400229893

### Key findings: behavior, governance, and supervision
- Market participants value their relationship with the Finnish Financial Supervisory Authority, particularly during crisis periods.
- Market participants noted that extra resources and expertise would be useful for the NBFI sector.
- The Financial Sector Assessment Program analysis reveals a history of procyclical and herding behavior in the PIC portfolios.
  - The procyclical and herding behavior is driven by the substance and perception of the solvency regulations, which influence market participant behavior.
- Liquidity risks are assessed as low in the current environment.

### Policy analysis and recommendations
- Discussion on further reforms to the 2017 solvency laws should focus on enhancing the long-term purpose of the PICs to generate returns—to the benefit of all social partners and Finnish citizens.
- Even though liquidity risks are low, a liquidity regulation should be developed so that PICs have sufficient buffers for extreme events.
- Strengthening supervisory capacity for the NBFI sector by providing additional resources and expertise to the Finnish Financial Supervisory Authority is recommended to improve crisis response and oversight.

### Thematic labels and topics covered
- Subjects: Expenditure, Financial institutions, Financial sector policy and analysis, Insurance, Insurance companies, International organization, Labor, Monetary policy, Pension spending, Pensions, Solvency
- Keywords: Europe, finance disclosure Regulation, FSAP's finding, Global, Insurance, Insurance companies, investment allocation, Pension insurance company, pension insurance company Market, Pension spending, Pensions, PIC asset allocation, PIC equity investment, Solvency

*Source: Finland: Financial Sector Assessment Program-Technical Note on Non-Bank Financial Intermediation and Pension Insurance Companies (IMF Staff Country Reports 2023, 064), February 1, 2023.*

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_Source: https://www.imf.org/en/publications/cr/issues/2023/01/31/finland-financial-sector-assessment-program-technical-note-on-non-bank-financial-528770_