The Single Resolution Board (SRB) has calculated the amounts of EU stability contributions for 2019. The Financial Stability Authority (FSA) has submitted the SRB's decisions on EU stability contributions to Finnish credit institutions and ordered the contributions payable by decisions made by it on 29 April. This year, the FSA collects a total of EUR 216 million from Finnish institutions to the Single Resolution Fund (SRF). The FSA has ordered both the national and EU contributions for 2019 payable by the end of May. The obligation to pay stability contributions applies to credit institutions and certain investment firms.
In accordance with the SRM Regulation (EU 2014/806), the target level of the Single Resolution Fund in 2023 is at least 1% of the amount of covered deposits of credit institutions authorised in all participating Member States. The SRB has decided to apply a level of 1.15% of covered deposits in the calculation of 2019 contributions in order to ensure the achievement of the target level within the prescribed time.
The calculation basis for stability contributions until 2022 has two parts. It consists of the calculation of the share of the national credit institution sector (BRRD share) and the common share of all credit institutions within the banking union (SRM share). Accordingly, the size and degree of risk of each paying entity determine the amount of stability contributions collected from it. Hence, when assessing developments in stability contributions, attention must be paid on developments in the size and degree of risk of the institution as well as in the credit institution sector both in Finland and in the banking union.
In 2019, the amount of EU contributions reflected to a material extent the growth of the Finnish credit institution sector following Nordea's redomiciliation to Finland in October 2018. The entry of a new bank increased the total amount of covered deposits and the aggregated balance sheet within the scope of Finland's deposit guarantee scheme, as a result of which the amount of EU contributions grew significantly from the previous year.
In addition to EU stability contributions, the FSA also collects stability contributions of approximately EUR 12 000 from certain investment firms, accumulating in the national resolution fund. As calculated on the basis of the situation in 2019, the target level for the resolution fund to be achieved by 2024 under the Act on the Financial Stability Authority is approximately EUR 127 000.
For further information, please contact Riku Thilman, Economist ([email protected])
