Supervision release 13 October 2026 - 48/2026

Shortcomings in compliance with provisions on mortgage credit bank operations

During 2026, the Financial Supervisory Authority (FIN-FSA) examined compliance with provisions on mortgage credit bank operations (MCB operations) at mortgage credit banks and credit institutions pursuing mortgage credit bank operations under its supervision.

In the thematic review, the FIN-FSA identified shortcomings in the following areas. The findings are based on information provided by the banks.

  • Regulatory compliance of loans used as collateral for a covered bond, and/or verification of their eligibility
  • Ensuring the appropriateness of the ratio between the loan and the market value of the property used as collateral at the time of entry in the bond register
  • Valuation and monitoring of the collateral for a loan secured by immovable property
  • Insurance of risks of damage to collateral
  • Use of substitution assets in compliance with regulation
  • Process and practices for monitoring the composition of the cover pool
  • Instructions for calculating the coverage of the cover pool
  • Determination of the total value of the cover pool, and related instructions
  • Creation of a record of entries in the bond register
  • Verification of the accuracy of information to be entered in the bond register
  • Definition in internal instructions of the tasks of the risk control function in relation to MCB operations
  • Definition in internal instructions of the tasks of the compliance function in relation to MCB operations
  • Internal audit assessment of the procedures of MCB operations
  • Annual approval, in accordance with the requirements of the law, of the relative share of mortgage credit bank operations in the credit institution’s overall business activities

FIN-FSA's actions

The FIN-FSA will use the findings as a basis for targeting its supervisory activities. Individual supervision letters will be sent to the banks, and the supervised entities will be required to remediate the shortcomings identified in the assessment.

For further information, please contact

  • Torsten Groschup, Chief Specialist, tel. +358 9 183 5333 or torsten.groschup(at)finanssivalvonta.fi
  • Anna Myllymäki, Chief Specialist, tel. +358 9 183 5020 or anna.myllymaki(at)finanssivalvonta.fi