The Financial Supervisory Authority announced in December that it would start preparations to increase mortgage risk weights. The risk weight determines how much a bank needs its own capital in relation to credit, so that it is able to cover the related credit loss risk. Currently major Finnish banks’ average mortgage credit risk weights are at approx. 6-8 per cent. The IRB system, which the biggest banks use, allow for a bank to use its own credit loss parameters when calculating risk weights. In Finland, four creditors: OP Group, Nordea, Ålandsbanken and Aktia are authorized by The Financial Supervisory Authority to use the IRB model.

Media:  Kauppalehti 

Date: 14.1.2016

Journalist: Maija Vehviläinen

Main source: