Finnish FSA Needs New Tools to Increase Stability, Report Says

Finland’s financial regulator should be allowed to limit mortgage lending and decide on additional capital buffers for banks to prevent asset price bubbles, according to a report.

The Financial Supervisory Authority should be able to enforce loan-to-value ratios, according to a report by a working group set by the Finance Ministry on Jan. 20. The group is scheduled to give a final assessment of the required regulatory measures by the end of the year.

The Helsinki-based watchdog recommends banks lend at most 90 percent of the property’s value. The regulator lacks the power to enforce the recommendation.

To contact the reporter on this story: Kasper Viita in Helsinki at kviita1@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net

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