Other systemically important institutions buffer

The aim of the other systemically important institutions buffer is to increase the resilience of systemically important market participants. Their importance may stem from their size, their complexity or their interdependence with other participants in the financial system.

Eesti Pank has named six banks as systemically important credit institutions: Swedbank AS, AS SEB Pank, Luminor Bank AS, AS LHV Pank, Bigbank AS and Coop Pank AS. Swedbank AS, AS SEB Pank, Luminor Bank AS and AS LHV Pank are subject to an O-SII buffer requirement of 2%. Bigbank AS and Coop Pank AS will be subject to a buffer rate of 0.5% from 1 January 2025. The buffer requirement applies to the total risk exposure of systemically important credit institutions, and must be met by common equity tier 1 own funds.

The six systemically important banks hold roughly 94% of the total assets of the banking sector with a value close to 131% of GDP. The additional buffer will help reduce the negative impacts that possible financial problems at one systemically important bank could cause for the functioning of the financial system and for the real economy.

Eesti Pank assesses the systemic importance of credit institutions each year and updates the list of credit institutions that are important to the domestic financial system. Eesti Pank uses the guidelines issued by the European Banking Authority (EBA) for its assessment, and also considers the specific features of the Estonian financial system.

See The principles for identifying the systemically important credit institutions in Estonia and calibrating the buffer rates