Banks’ macroprudential buffer requirements lighter in Finland than in its peers

Abstract

The primary task of macroprudential buffer requirements is to promote financial stability, but significant cross-country differences in the calibration of the buffers may weaken the level playing field for banks. When comparing the size of macroprudential buffer requirements, account should be taken of the nature of systemic risks covered by the buffers. There are, namely, significant country- and bank-specific differences in the systemic risks underlying the buffer requirements. At present, the structural macroprudential buffer requirements imposed on the Finnish banking sector are lower on average than the buffers in peer countries with similar structural risks.