FINFSA Covid Impact on Operations


On Sep. 15, FINFSA issued update on Covid effect on rates, solvency.


  • FINFSA said financial sector has so far withstood Covid effects on interest rates well.
  • However, the operating environment for various companies remains uncertain.
  • Overview
  • The economic downturn and pandemic affect different actors with different intensity.
  • Several public and private sector actions have supported the real economy e.g. FSB's macro-prudential decisions have maintained lending and recommendation to refrain from profit-sharing has strengthened the risk-bearing capacity of financial actors.
  • Installment breaks granted by banks have eased situation for households and businesses whereas monetary and fiscal policy has also been accommodative.
  • Recovery Outlook
  • Finnish economy is forecast to recover from H2 2020 but uncertainty, risks still high.
  • In fact, exceptionally high; in most recent risk assessments, ESAs have assessed risk level to be either high or very high; thus even more important all actors assess risks.
  • Providers of investment services must take into account risks related to exceptional market situation when offering their services, especially to retail clients.
  • Other Aspects
  • Loss resilience of banking sector remains strong, uncertainty related to development of the pandemic and wide-ranging repayment freedoms weaken visibility to credit risks.
  • Solvency of life insurance sector withstood market changes well whereas solvency of non-life insurance companies is good although it weakened compared to 2019-end.
  • Risk-bearing capacity of employment pension institutions remains at a reasonable level despite weakened solvency; situation of unemployment funds changed dramatically in the spring and the situation improved during summer.

Regulators FINFSA
Entity Types B/D; Bank; HF; IA; Ins; Inv Co; Pension
Reference PR 9/15/2020; COVID-19
Functions Compliance; Financial; Legal; Operations; Risk; Treasury
Countries Finland
Products Banking; Equity; Fund Mgt; Insurance; Insurance-Casualty; Insurance-Health; Insurance-Life; Insurance-Property; Pensions; Securities
Regions EMEA
Rule Type Guidance
Rule Date 9/15/2020
Effective Date 9/15/2020
Rule Id 86132
Linked to N/A
Reg. Last Update 9/15/2020
Report Section EU

Last substantive update on 09/15/2020