The systemic risk buffer is intended to increase the resilience of the financial sector to non-cyclical risks that could have a serious negative impact on the national financial system or the economy.
The main reason for applying the systemic risk buffer requirement lies in the small... more
The banks operating in Estonia are making more provisions due to the uncertainty surrounding the coronavirus, whereas the volume of provisions is still relatively small. Banking sector profits reached 112 million euros in the second quarter... more
The precept and fine issued by Finantsinspektsioon to SEB Pank on Thursday illustrated the need for banks in Estonia to develop their know-your-client systems to make them smarter.
“It is unfortunate that despite the efforts that banks in Estonia have made in recent years to deal more... more
The coronavirus pandemic has inflated the economic crisis in Estonia and in the global economy in recent months and is dragging on the future outlook for businesses. Economic uncertainty has caused many long-term investments to be put on... more
The countercyclical capital buffer is intended to protect the banking sector against losses that could be caused by cyclical systemic risks increasing in the economy. Countercyclical capital buffers require banks to hold capital at times when credit is growing rapidly so that the buffer can be... more
Restrictions introduced because of the coronavirus mean a broad economic downturn is expected this year, and so many companies and households will face difficulties in repaying their loans. To avoid payments becoming overdue, the banks... more
The latest financial stability review from Eesti Pank finds that the banks have sufficient capital buffers even if restrictions remain in place for long time. The central bank estimates that if the restrictions last until August, the share of problem loans will rise to 13% of the loan portfolio... more
The macroprudential tools available to Eesti Pank can be divided into three groups:
1) Moral suasion measures, with which Eesti Pank can draw the attention of market participants to vulnerabilities in the financial system and so influence their decisions indirectly. This can include... more
The sharp deterioration in the economic environment caused by the emergency situation has affected the market for car leases very fast. Reduced demand for car leases was one of the first signs of the loan market cooling. Momentum meant... more