Housing loan risk weights affect banks’ capital adequacy Mortgage lending can be reined in by setting higher risk weights for loans. There are, however, differences in calculation methods. Harmonisation would enhance a level playing field between banks. Share Email Twitter Facebook Linkedin Google+
Insurance companies as major investors are a potential source of systemic risk Insurance companies’ role as major investors can cause market disruptions if the companies have to resort to forced sales. Share Email Twitter Facebook Linkedin Google+
Major changes underway in European banking sector The crisis is affecting banks’ business models. In the euro area, bank profitability has been eroded by the path of the economy, weak credit developments and the prolonged period of low interest rates. Share Email Twitter Facebook Linkedin Google+
Overheating of global financial market could also have a destabilising impact on Finland The financial crisis has increased our understanding of cross-border stability threats. Overheating on the international financial markets would push up asset prices and possibly also increase the supply of loans. Share Email Twitter Facebook Linkedin Google+
Low interest rates provide a stimulus but can also create risks Accommodative monetary policy is necessary for price stability and economic recovery. However, it may create risks for financial stability. Share Email Twitter Facebook Linkedin Google+
Financial stability assessment: Household debt and banking sector concentration pose risks for Finland According to the Bank of Finland’s stability report, the financial system has remained stable despite the lack of improvement in the Finnish economy. Weak developments of the Finnish economy and risks building up on the financial markets, such as growing search for yield and low interest rates, could expose the system to risks. Share Email Twitter Facebook Linkedin Google+
Could a cyber attack lead to financial crisis? Confidence is vital to the financial system. Could the next crisis stem from banks’ faltering confidence in other banks’ systems, caused by a cyber attack? Share Email Twitter Facebook Linkedin Google+
One country, many housing markets Housing debt is concentrated in the Helsinki metropolitan area and other growth centres, where housing is more expensive. A large proportion of loans is borne by a small proportion of households. Share Email Twitter Facebook Linkedin Google+
Concentrated banking system amplifies banking crises The consequences of a banking crisis could be severe in the exceptionally concentrated Finnish banking system. Share Email Twitter Facebook Linkedin Google+