FIN-FSA amends Regulations and guidelines 3/2015 on calculation of maximum loan-to-value ratio – amendments to take effect on 1 October 2017

The Financial Supervisory Authority (FIN-FSA) has amended its regulations and guidelines of 6 June 2017 on the calculation of the maximum-loan-to-value ratio. The amendments are due to the regulation governing the calculation of the value of deficiency collateral, which has been observed to tighten the calculation of the value of third-party pledges posted by private customers in a manner that was not discovered in connection with the previous round of amendments to the regulations and guidelines. At the same time, some other technical adjustments have been made elsewhere in the regulations and guidelines.

The FIN-FSA has amended the regulation governing the calculation of the value of deficiency collateral (section 4.1, paragraph 5) to provide that the value of deficiency collateral will be the total fair value of the underlying object posted as deficiency collateral. In determining the value of the deficiency collateral employed in calculating the maximum loan-to-value ratio, any loans weighing on the underlying object posted as deficiency collateral and reducing the fair value of the underlying object shall be taken into account. The complete regulations and guidelines are available on the FIN-FSA's website.

The regulations and guidelines will enter into force on 1 October 2017.

For further information, please contact

• Jukka Aaltonen, Banking Inspector, tel. +358 9 183 5217, email: jukka.aaltonen(at)fiva.fi
• Tomi Halme, Risk Specialist, tel. +358 9 183 5233, email: tomi.halme(at)fiva.fi  

Annexes

Regulations and guidelines 3/2015: Calculation of maximum loan-to-value ratio (Link fixed on 18 September 2017.)