Finance Finland (FFI) has committed to transparency in its lobbying. We support greater transparency in all activity that seeks to influence the preparation of legislation and the use of budgetary powers in Finland or in the EU.
Lobbying is part of democracy. A skilled decision-maker listens to the viewpoints of multiple interest groups and experts before making a decision.
The Finnish Ministry of Justice is preparing an act on a statutory transparency register, which would impose a registration obligation on organisations and individuals engaged in lobbying activities. The preparation of the act continues in 2021, and the transparency register is scheduled to activate during 2023. FFI supports the establishment of a transparency register that applies to meetings and interaction with the parliament and the ministries.
Even before a statutory transparency register is established, FFI wants to disclose its lobbying activities for the previous year: the political decision-makers, i.e. members of the Finnish Parliament, ministers and state secretaries to the ministers, members of the EU Parliament and Commission officials whom we have lobbied in our key themes. The names of the decision-makers on the list are published due to their significant political position.
We also represent the interests of the Finnish financial sector in Brussels. FFI is a long-time member in the EU Transparency Register.
In Brussels, we organise lobbying events at the Nordic Finance Office we share with the other Nordic banking and securities associations. Last year, we met with EU Commission officials, member states’ representatives and MEPs. We also engaged in discussion with many other Brussels-based interest groups. Our experts actively participated in the formulating of common positions in our EU umbrella organisations.
Our dialogue with various interest groups and authorities has been related to legislative projects and other current financial sector themes with national or EU-wide relevance. FFI experts have also participated in a number of ministerial expert working groups focused on the preparation of legislation that is essential to the sector. Our experts have also been consulted in Finnish parliamentary committees.
We have listed our key lobbying topics for 2020. The listing discloses FFI’s position on each issue and the decision-makers we met with.
FFI’s member organisations have worked in close cooperation with the Finnish Government and authorities to mitigate the negative economic effects of the COVID-19 pandemic. Finnish banks have been able to grant loan grace periods and continue their lending activities due to their healthy and stable condition. Other financial sector companies have also offered flexible arrangements to their customers. FFI made a public declaration describing ways in which the sector has contributed to the common efforts to facilitate economic recovery
We support the measures to limit global warming in accordance with the Paris Agreement. FFI supports the EU goals of sustainable finance but notes that the markets must retain their flexibility to enable different models of sustainable finance. Because regulation has long-term impact on investment, it must be carefully prepared and based on adequate impact assessment. Key projects in sustainable finance legislation include the EU Taxonomy and the Sustainable Finance Disclosure Regulation. New legislation is already being planned.
The over-indebtedness of households must be curbed. One of the effective ways to prevent over-indebtedness is to establish a positive credit register, the preparation of which has already begun. Indebtedness is also linked to the ability to understand and manage personal finances. FFI has long been lobbying for a national strategy for financial literacy.
We take a critical stance towards any measures that weaken banks’ lending capacity and the mobility of workforce. The proposed limit on the loan-to-income ratio should take first-time home buyers better into account. Legal limits for the maturity of housing loans are not needed in Finland. The impact on workforce mobility and the housing market must be carefully evaluated during the review of legislation. A housing company loan ceiling is necessary to implement, and microlending institutions must come under the supervision of the FIN-FSA.
FFI published a joint appeal on home loan regulation with central labour market organisations
FFI is involved in the Ministry of Justice project preparing a positive credit register. FFI was involved in the Ministry of Finance working group recommending measures to help curb household debt. FFI entered a statement to the working group’s report. FFI actively participated in the preparation of a national strategy for financial literacy under the lead of the Bank of Finland.
Based on good international experience, FFI has proposed expanding cooperation and information exchange also in anti-money laundering, and establishing a permanent cooperation group to improve dialogue both nationally and internationally. Simple and effective ways to prevent money laundering include establishing an up-to-the-minute situational picture and regular feedback from relevant authorities. The same objectives must be promoted also in EU-level regulation. Supervision must be enhanced to prevent money laundering on both national and EU level. Authorities must be guaranteed sufficient resources for the prevention of money laundering. EU-level regulation must be harmonised, because money laundering is a cross-border phenomenon.
FFI’s representative participated in a CEPS think tank led by MEP Eero Heinäluoma. The think tank agreed on a set of recommendations for upcoming AML regulation.
FFI is involved in a ministerial working group preparing the comprehensive reform of money laundering legislation.
The implementation of new regulation in the EU must take the special characteristics of European banking and financial markets into account. Banks have a key role in the financing of businesses and households in all EU states, and their regulation and capital adequacy requirements were tightened already in the 2010s. FFI emphasises it is important to avoid groundlessly raising capital requirements and causing detrimental effects on the national economy and businesses’ access to financing.
FFI is engaged in close cooperation with the Swedish and Danish banking associations.
FFI is working on the national and EU levels to ensure that the review of the Solvency II regulatory regime is carried out with sound judgement. We hold the view that its risk-based approach must be preserved, and the principle of proportionality must be defined in more detail. The review must not result in unnecessarily stricter solvency regulations, which could hamper the promotion of sustainable and long-term finance.
FFI does not support the idea of a European insurance guarantee scheme that is being discussed in the EU. We refer to the 2015 position of the Finnish Government and Parliament, maintaining that Finland should be opposed to the harmonisation of member states’ national legislation of insurance guarantee schemes, because the directive could force Finland to make changes to the cover of statutory non-life insurance policies. In the Finnish life insurance market, harmonised IGSs could increase systemic risk, which would undermine the standing of healthy insurance companies.
Imposing additional capital requirements on banks is not the right solution in the current coronavirus-induced economic crisis. FFI was involved in the Ministry of Finance working group on the national implementation of the EU banking package. The working group proposed giving authorities the power to raise the combined buffer requirement above the current maximum amount. FFI entered a dissenting opinion in the working group’s report. We demand more detailed requirements to the calculation principles of systemic risks and clearer rules for the authorities’ power to raise buffer requirements.
FFI supports the banking union but thinks that expanding risk sharing should not be rushed. Implementation of a European deposit insurance scheme first requires risk reduction as well as the reduction of non-performing loan exposures.
FFI did not stand in favour of the Eurogroup’s decision to speed up the introduction of the backstop to the Single Resolution Fund and to advance the mutualisation of extraordinary ex-post contributions. The original timetable should not have been altered before the risks of banking union member banks had been significantly reduced.
With responsible utilisation of the digital economy, the financial sector can provide better and more affordable services to its customers and the society at large. We emphasise that the EU digital single market needs a uniform set of rules. It is important that the regulatory treatment of new participants entering the market is equal to that of traditional financial companies. Too specific and overly detailed regulation may quickly become outdated given the rapid technological progress. The new regulation in the European Digital Strategy must not stand in the way of new business models, but rather enable them.
The work on a stronger and more integrated capital markets union in the EU must continue. The development of active and diverse capital markets must be primarily market-driven. Investment decisions or the steering of investment should not be affected through regulatory means. The overall aim of the capital markets union is increasing and diversifying the funding sources for businesses, boosting the functioning of markets, and creating jobs, growth and investment in Europe.
In the revision of the Markets in Financial Instruments Directive (MiFID II), FFI supports promoting efficient EU capital markets while also taking the requirements of transparency and investor protection into account. Companies’ access to equity financing should be made easier and more affordable. Proposals that seek to reduce the administrative burden of investment service providers and companies are particularly welcome.
FFI has cooperated with Nordic securities trade associations regarding the MiFID II amendments and our work to influence the contents of the upcoming revision.
The problems of Finnish personal identity codes must be solved in a cost-efficient manner. We propose that the issues of data protection, gender neutrality and the sufficiency of available unique personal identity codes are solved without a comprehensive reform of the system, and are willing to participate in further work on the matter. In December 2020, the Government decided to relaunch the reform on a new basis.
In addition to decision-makers and officials, FFI has had discussions on the reform with the representatives of the Social Insurance Institution Kela, the Tax Administration, the Finnish Centre for Pensions, and the Association of Finnish Local and Regional Authorities. Regarding the gender information of personal identity codes, FFI has had discussions with the representatives of the Finnish LGBTI rights organisation Seta and Trasek, a Finnish association for transgender and intersex rights.
The Finnish financial sector is committed to measures to ensure the least possible disruptions to financial services in emergency conditions. Cooperation between the financial sector, other Finnish industries, and relevant authorities is the most efficient way to engage in preparedness. Additional requirements based on national legislation are not suited for the European Single Market.
The financial sector completed an assessment of the continuity of critical financial services in emergency situations in late 2020. The report presented recommendations for enabling the continuity of credit transfers, card payments and securities trade under emergency situations and similar disruptions.
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