EBA issues Opinion on measures to address macroprudential risk following notification by Finnish FSA

  • News
  • 31 July 2019

The European Banking Authority (EBA) published today an Opinion following the notification by the Finnish Financial Supervisory Authority (FIN-FSA) of its intention to extend a measure introduced in 2017 regarding the use of Article 458 of the Capital Requirements Regulation (CRR). The measure is primarily driven by persistent macroprudential risks in the Finnish economy related to residential mortgage loans and residential mortgage indebtedness. Based on the evidence submitted, the EBA does not object to the extension of the proposed measure, which will be applied from 1 January to 31 December 2020.

The measure consists of the extension of a credit institution-specific minimum level of 15% for the average risk weight on residential mortgage loans applicable to credit institutions that have adopted the internal ratings-based (IRB) approach.

In its Opinion, addressed to the Council, the European Commission and the Finnish authorities, the EBA, in line with the warning on the vulnerabilities of the residential real estate sector issued by the European Systemic Risk Board (ESRB), acknowledges that the systemic risks and vulnerabilities related to housing loans and household indebtedness in Finland could pose a threat to the financial stability of banks.

In light of this conclusion, the EBA does not object to the deployment, by the FIN-FSA, of the proposed macroprudential measures.


Already in its Opinion issued on 27 July 2017, the EBA did not object to the adoption of this measure, taking into consideration its effect on increasing the resilience of the Finnish banking sector. For more information on this EBA Opinion, please see here.


EBA Opinion on measures in accordance with Article 458 (EBA-Op-2019-07)

(168.96 KB - PDF) Last update 30 July 2019

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