Press release 28 August 2017

Minimum risk weights on mortgage loans will rise to 15% on 1 January 2018, the European Commission did not object to the FIN-FSA’s decision

On 26 June 2017, the Board of the Financial Supervisory Authority (FIN-FSA) made a conditional decision on raising the minimum risk weight level for residential mortgage loans to 15%. The decision is applicable to banks that have adopted the Internal Ratings Based Approach for the calculation of capital requirements, which in Finland are OP Group, Danske Bank Plc, Nordea Mortgage Bank Plc, Aktia Bank Plc and Bank of Åland Plc. On 21 August 2017, the European Commission made a decision not to object to the decision of the Board of the FIN-FSA. The FIN-FSA’s decision will therefore enter into force on 1 January 2018.
“The European Commission and other EU authorities consider the raising of risk weights in this situation as an effective means of strengthening the resilience of the financial system. At the same time, they strongly encourage the continued development of macroprudential instruments in Finland, which supports the preparatory work we have under way,” says Dr Olli Rehn, Chairman of the Board of the FIN-FSA.
The size of the risk weight determines the amount of own funds that a credit institution must hold on its balance sheet to hedge against credit losses from residential mortgages.
The FIN-FSA will also take steps to ensure that foreign supervisory authorities require the same minimum risk weight from banks under their supervision that grant residential mortgages to Finns.

For further information, please contact

  • Jyri Helenius, Deputy Director General
  • Requests for interviews are coordinated by FIN-FSA Communications, tel. +358 9 183 5030, weekdays 9.00–16.00


The corresponding press release was published in Finnish on 25 August 2017.