FI recognises the risk weight floor for Finnish mortgage exposures

Finansinspektionen has passed a decision to recognise the Finnish supervisory authority’s decision to implement an average, firm-specific risk weight floor of 15 per cent for Finnish mortgage exposures.

FI's decision applies as of 1 January 2018 for the Finnish branches of Swedish credit institutions with authorisation to use an IRB approach to calculate capital requirements for credit risks.

FI will apply a materiality threshold of EUR 1 billion as stated by the Finnish supervisory authority. This means that exposures in Finnish branches of Nordea Bank AB, Handelsbanken AB and Stadshypotek AB are now covered by the risk weight floor. The floor affects the firms on an individual level as well as on a consolidated level.

FI's decision to reciprocate the Finish macroprudential measure has been notified to the relevant EU authorities and Finland.

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