Finland: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions

IMF Staff Country Reports, February 1, 2023

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Finland: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions

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Bibliographic details

• Published: February 1, 2023
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400229695.002

Overview and key findings

• The technical note highlights Regulation and Supervision of Less Significant Institutions for the Finland Financial Sector Assessment Program.
• Finnish banks’ financial indicators remained strong despite the pandemic.
• The authorities made good progress on the implementation of the recommendations of the 2016 Basel Core Principles assessment.
• The legal framework in Finland limits Finnish Financial Supervisory Authority’s (FIN-FSA) power to issue binding regulations.
• The assessment revealed that availability of resources is a challenge for the FIN-FSA.
• The supervisory approach and tools of the FIN-FSA improved conspicuously but there is room for further improvement.
• It is important for the FIN-FSA to complete the necessary work for supervisory boards to be covered by the regulatory and supervisory framework.

Supervisory gaps and implications

• Legal constraint: FIN-FSA’s limited power to issue binding regulations constrains regulatory effectiveness.
• Resource constraint: Availability of resources at the FIN-FSA is identified as a challenge for sustained supervision.
• Institutional coverage: Supervisory boards need to be brought within the regulatory and supervisory framework to ensure comprehensive oversight.
• Supervisory toolkit: While the supervisory approach and tools have improved conspicuously, further improvements are necessary to strengthen oversight of less significant institutions.

Subjects and keywords

• Subject: Bank supervision, Credit, Credit risk, Financial institutions, Financial regulation and supervision, Financial Sector Assessment Program, Financial sector policy and analysis, International organization, Loans, Monetary policy, Money
• Keywords: Bank supervision, banking supervision department, Credit, Credit risk, Europe, Financial Sector Assessment Program, Finland FSAP, FSAP's finding, Global, Loans, organization structure of the FIN-FSA, Tier 1

Finland: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions — February 1, 2023.

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