Lowering the loan cap will reduce the risks associated with debt Lowering the loan cap will mitigate household indebtedness and strengthen mortgage borrowers’ risk resilience. It will not, however, remove the risks relating to the record-high level of indebtedness. Share Email Twitter Facebook Linkedin Google+
Wide regional disparities in Finnish house prices and household indebtedness Housing debt has grown, both in absolute terms and relative to income, especially in growth centres, where housing is more expensive and subject to greater pressures from demand than elsewhere. Share Email Twitter Facebook Linkedin Google+
The Finnish real estate investment market The Finnish real estate investment market is lively and large in proportion to the size of the economy, foreign investment and high valuations may expose the Finnish market to economic shocks from abroad. The risks may reflect on banking particularly via lending. Share Email Twitter Facebook Linkedin Google+
Household indebtedness contributing to corporate loan losses When indebted households cut their spending during an economic downturn, this also increase the financial difficulties of non-financial corporations. Share Email Twitter Facebook Linkedin Google+
Instruments designed to mitigate indebtedness The aim of the loan cap is to rein in household indebtedness and prevent housing price bubbles. Finland badly needs other instruments that can also restrict indebtedness. Share Email Twitter Facebook Linkedin Google+
Progress in work to complete Banking Union A single European Deposit Insurance Scheme would reduce the risk of deposit runs. Share Email Twitter Facebook Linkedin Google+
Nordic banks go digital Finns are among the leaders in Europe in the use of digital financial services. Nordic banks have invested in digital services. Share Email Twitter Facebook Linkedin Google+
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. Share Email Twitter Facebook Linkedin Google+
Effects of the revised Payment Services Directive: first assessment In retail banking, the two key services are the provision of credit and management of payment transfers. The revised Payment Services Directive (PSD2), which entered into force in Finland in January 2018 may revolutionise the operating environment for banks. Share Email Twitter Facebook Linkedin Google+
Digitalisation poses new security challenges for payment systems Reliable payment and settlement systems are basic requirements for maintaining financial stability and fostering economic activity. Financial services providers must ensure the safe holding and preservation of data in their possession and recovery from problem situations within a digital environment. Share Email Twitter Facebook Linkedin Google+
Construction of a risk-based European Deposit Insurance Scheme Single deposit insurance is an important part of the completion of Banking Union. The deposit insurance fund needs to be sufficiently large to credibly withstand possible problem situations. Banks’ deposit insurance contributions should be calibrated based on risks. Share Email Twitter Facebook Linkedin Google+
Financial stability assessment: Finland's banking sector expands – Banking Union mitigates risks There are no immediate threats to the stability of the Finnish financial system. The relocation of Nordea’s corporate headquarters will, however, increase the banking sector’s exposure to structural vulnerabilities. Share Email Twitter Facebook Linkedin Google+
EU macroprudential policy lays emphasis on residential mortgage loans and the banking sector’s structural risks Regulatory reforms and macroprudential measures have improved the risk resilience of the bank-centred EU financial system. Work has also begun on targeting stability risks building up beyond the banking system. Share Email Twitter Facebook Linkedin Google+
The overall picture of debt accumulation gets blurred as provision of consumer credit becomes diversified Finnish household debt is rapidly increasing also via consumer credit. Loans taken out from these new sources is difficult to monitor. Share Email Twitter Facebook Linkedin Google+
Most significant international threats to stability relate to securities markets Investors’ optimism on the financial markets can rapidly turn to risk aversion if global economic or political uncertainty increases. Share Email Twitter Facebook Linkedin Google+
Risks in long-term and large home loans – Sweden's worry is also ours Households in both Finland and Sweden are carrying a record level of debt relative to their income. Share Email Twitter Facebook Linkedin Google+
Finland, the land of branches – the landscape of the Nordic banking sector The Finnish, Swedish, Norwegian and Danish banking sectors are large and concentrated and there are systemic risks relating to lending for the residential and commercial real estate markets. Share Email Twitter Facebook Linkedin Google+
Financial stability assessment: Nordic interconnectedness and indebted households pose a risk to financial stability Growing household debt and the changing structure of the banking system are increasing the vulnerability of the financial system. Share Email Twitter Facebook Linkedin Google+
Payments must be smooth under all circumstances It is important to ensure that payment transfers and card payments also operate when data connections with other countries are down. Share Email Twitter Facebook Linkedin Google+
Payments becoming increasingly real time and less visible The three key trends in payments are fragmentation of the market, payments going real time and the actual act of payment fading into the background. Share Email Twitter Facebook Linkedin Google+
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. Share Email Twitter Facebook Linkedin Google+
