Coronavirus pandemic changed the narrative of the year

In 2020, the coronavirus pandemic also affected the FIN-FSA's activities. In cooperation with other authorities, the FIN-FSA took several measures aimed at mitigating the negative economic impacts of the pandemic. These measures are discussed in particular in the article “Fast decisions supported banks’ resilient operation in exceptional circumstances”.

The coronavirus pandemic also had a significant impact on the operation of unemployment funds, as discussed in the article “Unemployment funds coped with the coronavirus pandemic despite record growth in applications and claims expenses”.

Work on strategic priorities continued

The FIN-FSA also continued its efforts on its strategic priorities, including the supervision of anti-money laundering, as discussed in the article “Risk-based approach is a cornerstone in the prevention of money laundering and terrorist financing”.

Supervision related to the digitalisation of the financial sector is another strategic priority, as highlighted in the article “Digital finance gaining ground – European Commission strategy to accelerate development”.

One of the main projects of recent years was the signal and analysis system, which improves the efficiency of market supervision. This topic is discussed in more depth in the article “Suspicions of market manipulation and abuse of inside information are detected and investigated increasingly effectively”.

The third strategic priority is the incorporation of the impacts of climate change and other sustainability risks into supervision. The European Supervisory Authorities continued working on international legislation for the financial services sector throughout the year, and the FIN-FSA contributed to the regulatory initiatives through the banking, insurance and securities market authorities alike. There was a particular focus on preparing the disclosure obligations concerning sustainability risks, since the EU’s action plan on sustainable finance includes an objective to increase the transparency of disclosures on sustainability risks and related risk management.

Climate change and other sustainability risks in the financial sector are primarily a question of risk management. The introduction of regulation as part of supervision has already commenced, and a clear need has emerged in the financial services sector for pan-European interpretation of regulation. The FIN-FSA and other national supervisory authorities continued their efforts to produce common supervisory practices and interpretations. The FIN-FSA also presented regulation and related changes in several webinars to supervised entities and other stakeholders in Finland.

Brexit also affected the financial sector

Brexit, i.e. the withdrawal of Great Britain from the European Union, entered into force at the end of the review year on 1 January 2021.

Brexit did not cause any sudden or steep price movements at the turn of the year, but its major impacts on the economy and the markets will only surface gradually in due course.

The FIN-FSA has assessed the impacts of Brexit on the financial industry together with other national competent authorities and the European Supervisory Authorities. In particular, interpretation has been needed in the application of contracts across the UK-EU border and in defining where an activity is considered a cross-border activity. In addition, the change has given rise to the need for companies that have become third-country entities to apply for authorisations and organise their activities so as to minimise any inconvenience to their customers. The FIN-FSA has also received dozens of applications and has already provided guidance to institutions regarding these changes.

The FIN-FSA and the ESAs provide technical advice to the European Commission on assessing the equivalence of financial sector regulation. The equivalence assessment remained unresolved in the context of Brexit, but preparation of the decisions will continue in the EU over the coming months. Equivalence assessment often includes an assessment of the content and effectiveness of legislation, which will reduce the risk of significant differences between EU and UK legislation in the future.