Tightening regulation has only a limited impact on loan margins
Haajanen, Jyrki; Putkuri, Hanna; Vauhkonen, Jukka (09.06.2015)
JulkaisusarjaBank of Finland. Bulletin
JulkaisijaBank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-201506101288
The foreseeable tightening of bank capital requirements will only marginally add to bank costs and, by extension, to loan margins. The other side of the coin is that the most important tool at the disposal of the Financial Supervisory Authority for preventing threats to stability from excessive credit growth – the countercyclical capital buffer requirement – may turn out to be a more ineffective macroprudential instrument than hoped for. Regulation of minimum risk weights for housing loans is likely to be a more effective tool for reining in excessive growth in lending for house purchase.