Finnish Commerce Committee’s position on Basel III package safeguards economic growth – Finland still lacking official position on EU negotiations

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The Finnish financial sector has demanded that Finland’s official position on the Commission’s Basel III implementation proposal must be responsible and safeguard economic growth. On 16 December 2021, the Finnish Parliament’s Commerce Committee gave a unanimous statement prioritising both financial stability and economic growth.

In its meeting of 17 December, the Parliament’s Grand Committee ruled that the Government is to deliver a follow-up communication on the EU negotiations process in spring term 2022. What this means is that Finland is still lacking an official position on a matter that is already being discussed in Council working groups. The Finnish financial sector understands the Grand Committee’s decision but is nevertheless concerned about Finland’s negotiating position.

“Finland needs to take a clear stance on the upcoming Basel negotiations without delay. Permanently safeguarding the risk sensitivity of banks’ capital requirements calculation and taking into account the special features of Finnish mortgage financing are the responsible line of action. It is untenable if Finland enters EU negotiations without a position to stand behind”, stresses Finance Finland’s (FFI) Managing Director Piia-Noora Kauppi.

According to Kauppi, the Commerce Committee’s position is especially valuable due to its unanimity. “This shows that the importance of banks as enablers of economic growth is understood across political party lines. Post-pandemic recovery and the green transition will require a large volume of private investment”, Kauppi adds.

FFI’s Head of Banking Regulation Olli Salmi agrees that the Commerce Committee’s statement was balanced and well thought-out. “The statement’s consideration of the regulatory environment and the economy is realistic and versatile. Different viewpoints and needs, such as economic stability and the preconditions of economic growth and green investment, are nicely brought together in this technically demanding and broad context.”

According to Salmi, the Commerce Committee’s statement would work as good guidelines for Finnish negotiators in the EU negotiations.

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Financial and Prudential Regulation

Olli Salmi

Head of Banking Regulation