Template for notifying national macroprudential measures not covered by CRR/CRD
Please send this template to
- notifications@esrb.europa.euwhen notifying the ESRB;
- macropru.notifications@ecb.europa.euwhen notifying the ECB.
Emailing this template to the above-mentioned addresses constitutes an official notification, no further official letter is required. In order to facilitate the work of the notified authorities, please send the notification template in a format that allows electronically copying the information.
1. Notifying national authority and scope of the notification
1.1 Name of the notifying authority. | FIN-FSA |
1.2 Name of the macroprudential measure | Loan-to-collateral, LTC | |
that is notified. | ||
2. Description of the measure | ||
2.1 | Description of the measure. | Maximum loan-to-collateral (LTC) ratio, as referred to in |
chapter 15, section 11 of the Credit Institutions Act. The | ||
statutory standard level of the LTC ratio is 90% for | ||
residential mortgage loans other than first-home loans. | ||
The level may be lowered by 10 % based on a decision | ||
by the FIN-FSA Board. With the decision of 19 March | ||
2018, the Board lowered the maximum LTC ratio for | ||
residential mortgage loans other than first-home loans by | ||
5 percentage points. On 29 June 2020, The FIN-FSA | ||
Board decided that the LTC ratio will be adjusted and | ||
brought back to the statutory standard level of 90%. | ||
2.2 | Legal basis and process of | Chapter 15, section 11 of the Credit Institutions Act. |
implementation of the measure. | ||
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Date of template version: 2016-03-01
2.3 | Coverage | Mortgages to households provided by credit institutions | |
2.4 | Any other relevant information. | The aim of the FIN-FSA Board decision was to promote | |
the functioning of the housing and mortgage market | |||
during the stressed situation due to the pandemic. | |||
3. | Timing | ||
3.1 | Timing of the decision | 29 June 2020 | |
3.2 | Timing of the publication | 29 June 2020 | |
3.3 | Disclosure | Press release: | |
https://www.finanssivalvonta.fi/en/publications-and-press- | |||
releases/Press-release/2020/macroprudential-decision- | |||
residential-mortgage-loan-cap-to-be-relaxed- | |||
countercyclical-capital-buffer-rate-remains-unchanged-at- | |||
0.0-percent/ | |||
3.4 | Timing of the application | The decision entered into force on 29 June 2020 | |
3.5 | End date (if applicable) | n.a. | |
4. Reason for the activation of the measure
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4.1 | Description of the macroprudential risk to | Bringing the maximum LTC ratio for residential mortgage |
be addressed. | loans other than first-home loans back to the base level | |
was done in order to support the housing market and the | ||
real economy in the current exceptional circumstances. | ||
Over the past year, about three quarters of the euro | ||
volume of new residential mortgage loans have been | ||
housing loans other than first-home loans. Relaxing the | ||
LTC ratio for these loans could increase housing demand | ||
and total demand compared with a situation where the | ||
tighter LTC ratio would continue to apply. Supporting | ||
demand can contribute to offsetting the contraction in | ||
house sales and the economy and thus alleviate the | ||
threat of an exceptional build-up of risks to financial | ||
stability. As a whole, however, the impact of the measure | ||
will be fairly limited in the current situation. | ||
4.2 | Description of the indicators on the basis | Estimated development of mortgage demand |
of which the measure is activated. | ||
4.3 | Effects of the measure. | See 4.1. |
5. Cross-border and cross-sector impact of the measure | ||
5.1 | Assessment of cross-border effects and | The measure applies to all domestic and foreign |
the likely impact on the internal market | mortgage providing credit institutions in Finland. The | |
(Article 133(11)(d) of the CRD IV and | market share of mortgage providers other than banks is | |
Recommendation ESRB/2015/2) | insignificant taking into account the objective of the | |
measure. | ||
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5.2 | Assessment of leakages and regulatory | n.a. | |
arbitrage within the notifying Member | |||
State | |||
5.3 | Request for reciprocation | n.a. | |
6. | Miscellaneous | ||
6.1 | Contact person(s) at notifying authority. | Peik Granlund, peik.granlund@fiva.fi, tel.+358-9- | |
1835236 | |||
6.2 | Any other relevant information. | ||
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ESRB - European Systemic Risk Board published this content on 19 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 October 2020 15:34:00 UTC