Latest articles and blogs
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Macroprudential policy should be reshaped, not dismantled
Macroprudential policy has been used to protect against the systemic risks associated with a concentrated banking sector and high household indebtedness. There is scope for simplification in the regulation of the banking sector. There should also be greater consistency among EU countries in their use of macroprudential instruments.
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Capital buffer requirements included in the macroprudential toolkit are supporting the risk-bearing capacity of banks
Capital buffer requirements imposed on banks are among the most important instruments available in the macroprudential policy toolkit. They protect the ability of banks to withstand losses and provide credit during severe economic and financial crises.
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How can Finland’s use of the countercyclical capital buffer requirement be further developed?
In Finland, it should be possible to impose a countercyclical capital buffer requirement on banks before the credit cycle overheats. This would allow the authorities, as necessary, to lower the capital requirements for banks during a crisis situation on a more flexible basis than at present.
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Macroprudential toolkit should be replenished in Finland and Europe
In order to prevent crises, authorities should have a more flexible range of means at their disposal to strengthen banks’ risk resilience and contain excessive growth in credit and household indebtedness.
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Systemic risk buffer protecting the banking sector under difficult conditions
The systemic risk buffer is an additional capital requirement that can bolster Finland’s structurally vulnerable banking sector.
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How can we dampen the build-up of housing price bubbles?
A range of instruments could be deployed to restrain dangerous growth in lending for house purchase and household debt.
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A broader set of tools needed to prevent financial crises
The authorities should be equipped with new tools for ensuring the banking sector’s capital adequacy and preventing overheating on the housing market.