Stability contributions 

Stability contributions are based on the institution’s size and the risks associated with its operations 

The stability contributions collected for the Single Resolution Fund (SRF) are institution-specific and determined at the banking union level. SRB calculates stability contributions annually. The calculation of contributions is based on a Commission Regulation. The calculation takes into account the size of the institution and the risks associated with its operations. The obligation to pay contributions applies to all institutions in the banking union. In Finland, the Financial Stability Authority collects contributions from Finnish credit institutions and transfers them to the Single Resolution Fund.  

The contributions are determined by the size of each institution and the risks associated with its operations. If the risk level of an institution is very low relative to other operators, the contribution amount can be lowered, at most, to 0.8 times the normal contribution based on the institution’s size.  

Conversely, if an institution’s operations are deemed to involve high risk relative to other operators, the contribution amount can be increased to 1.5 times the normal contribution based on the institution’s size. As the calculation is based on the size of institutions and their risk level relative to other institutions in all of the countries belonging to the banking union, changes involving other institutions have an impact on the contributions payable by an individual institution. To reduce the administrative burden, the contribution payable by small institutions is fixed in amount. 

Chart: Determination of stability contributions

Two-part calculation basis 

Until 2022, the calculation basis for stability contributions consists of two parts: 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). The SRM share increases year by year and will reach 100 per cent starting from 2023. 
 
This means that the annual contributions collected from Finnish banks is increasingly dependent on the total amount of covered deposits in the entire banking union, not just in Finland. The size of the contributions will also be increasingly determined based on each institution’s size and business risks relative to the size and risks of other institutions throughout the banking union, not just in Finland. 

A backstop will be implemented for the Single Resolution Fund at the end of 2023 at the latest. In November 2020, the inclusive Eurogroup reached an agreement on the reform of the European stability mechanism and the related expedited implementation of the backstop effective from the beginning of 2022. The backstop will double the amount of funds available for resolution. It will make it easier to use resolution tools. The loan incurred from implementing the backstop will be repaid through contributions collected from the banking sector. 

The Financial Stability Authority collects the statistical information necessary for determining stability contributions from institutions annually, by the end of January. The information on the contribution amount calculated and decided on by the SRB is relayed to the institutions by the end of April. The due date for payment is the end of May.The Financial Stability Authority is responsible for collecting contributions from Finnish institutions. 


Chart: Stability contributions in Finland. To date, Finnish banks have paid stability contributions six times. In total, EUR 816 million of stability contributions have been collected. The target level of the Deposit Guarantee Fund in 2020 is estimated to be approximately EUR 1.1 billion.

The SRB publishes additional information on ex-ante contributions for each year on its English-language website.