Opinion of the European Central Bank of 31 August 2026 on the objectives of the Financial Supervisory Authority, restricted authorisations of credit institutions and amalgamations of credit institutions (CON/2026/28)

OPINION OF THE EUROPEAN CENTRAL BANK of 31 August 2026 on the objectives of the Financial Supervisory Authority, restricted authorisations of credit institutions and amalgamations of credit institutions (CON/2026/28) Introduction and legal basis

On 11 June 2026, the European Central Bank (ECB) received a request from the Finnish Ministry of Finance for an opinion on (1) proposals for amendments to, inter alia, the Law on the Financial Supervisory Authority (hereinafter the ‘draft law on FIN-FSA’) and the Law on credit institutions (hereinafter the ‘draft law on credit institutions’), (2) a proposal to repeal, inter alia, the existing Law on amalgamations of deposit banks , and (3) a proposal for a new Law on amalgamations of credit institutions (hereinafter the ‘draft law on amalgamation of credit institutions’, and together with the draft law on FIN-FSA, the ‘draft laws’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union as the draft laws concern the task of the European System of Central Banks to contribute to the smooth conduct of policies pursued by the competent authorities relating to the stability of the financial system pursuant to Article 127(5) of the Treaty and the ECB’s tasks concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. In accordance with Article 17.5, first sentence, of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

1. Purpose of the draft laws

The purpose of the draft law on FIN-FSA is to add a secondary objective for FIN-FSA of promoting competition in the financial markets, financial intermediation and sustainable growth of the real economy. The draft law on credit institutions amends several laws, including the existing Law on credit institutions , 3 4 the Law on mortgage banks and covered bonds , the Law on savings banks and the Law on mortgage societies . It is also proposed that a new Law on amalgamations of credit institutions repealing the existing Law on amalgamations of deposit banks should be introduced, and that the Law on commercial banks and other credit institutions in the form of a limited company and the Law on co-operative banks and other credit institutions in the form of a co-operative should be repealed. The purpose of the draft law on credit

1 Laki talletuspankkien yhteenliittymästä (599/2010).

2 Laki luottolaitostoiminnasta (610/2014).

3 Laki kiinnitysluottopankeista ja katetuista joukkolainoista (151/2022).

4 Säästöpankkilaki (1502/2021).

5 Laki hypoteekkiyhdistyksistä (936/1978).

6 Laki liikepankeista ja muista osakeyhtiömuotoisista luottolaitoksista (1501/2001).

7 Laki osuuspankeista ja muista osuuskuntamuotoisista luottolaitoksista (423/2013). institutions is to update the national regulatory framework governing the activity of credit institutions, mortgage banking, associations of deposit banks and forms of entities of credit institutions, to address shortcomings identified in the legislation and to achieve overall regulatory streamlining.

2. Scope of the opinion

The scope of this opinion is limited to the provisions of the draft laws concerning (a) the secondary objective of FIN-FSA, (b) the introduction of a restricted authorisation to undertake business as a credit institution, (c) changes to the national legal framework applying to amalgamations of credit institutions, and (d) miscellaneous provisions concerning the removal of restrictions on ownership of real estate by credit institutions and the requirement for a credit institution to have a permanent establishment in Finland.

3. Secondary objective for FIN-FSA

3.1 Purpose of the draft law on FIN-FSA 3.1.1 The draft law on FIN-FSA clarifies that the primary objective of financial supervision activities is the stability of credit institutions, insurance and pension institutions, and other supervised entities, so as to safeguard the interests of insured persons and maintain confidence in the financial markets, which is necessary for the stability of financial markets . The draft law on FIN-FSA also introduces a secondary objective for FIN-FSA that its activities should promote competition in the financial markets, the intermediation of finance into the real economy and sustainable growth in the real economy . 3.1.2 The explanatory memorandum accompanying the draft law on FIN-FSA notes the debate in recent years, at both Union and national level, on the need to simplify the regulation of markets and to strengthen their ability to contribute to economic growth. The explanatory memorandum also states that the proposed regulatory change to FIN-FSA’s objective is linked to the Finnish government’s objective of ensuring the stability, predictability and competitiveness of financial markets, noting that adequate regulation plays an important role in ensuring the stability of markets, while ensuring that obligations do not unreasonably increase the cost or availability of finance. 3.1.3 The explanatory memorandum accompanying the draft law on FIN-FSA states that although current Finnish law does not explicitly require FIN-FSA to take into account the strengthening of economic growth or financial transmission to the real economy, the objective of financial market regulation is, in principle, to support well-functioning markets, the efficient allocation of funding and thus the development of the real economy. Individual provisions, such as those on macroprudential instruments, may also currently require FIN-FSA to assess and take into account the impact of decisions on the economic situation and the activities of credit institutions. Against this backdrop, it is considered appropriate to complement regulation with an explicit provision to that effect. 3.1.4 The explanatory memorandum accompanying the draft law on FIN-FSA notes that the proposed change to FIN-FSA’s objectives will have some impact on FIN-FSA’s functioning and culture. It is

8 Laki Finanssivalvonnasta (878/2008), Chapter 1, Section 1.

9 Section 1 of the draft law on FIN-FSA. likely that this change will require some resources, for example to evaluate and change policies and processes, to train staff and so on. The draft law on FIN-FSA is expected to increase FIN-FSA’s efficiency and improve the proportionality and efficiency of financial supervision and interaction with industry, ensuring that supervisory requirements are proportionate to the risks they address, which could promote the role of financial markets and the financial sector in financing the real economy. 3.1.5 The explanatory memorandum accompanying the draft law on FIN-FSA states that the promotion of competition in financial markets, financial intermediation and sustainable real economic growth would take place over the long term, and that this objective would be secondary to the primary objective, meaning it would be promoted only insofar as possible without conflicting with the primary objective and cannot lead to a situation in which the primary objective is jeopardised. 3.1.6 The explanatory memorandum accompanying the draft law on FIN-FSA states the secondary objective would be of a general nature, meaning that it is intended to guide policy orientations or processes in the area of financial supervision. Furthermore, with a view to ensuring the certainty and equality of individual supervisory decisions and their compliance with substantive national and Union substantive law, the secondary objective would not apply to those decisions. The secondary objective would also be taken into account in decision-making on macroprudential instruments. In accordance with the law on FIN-FSA already in force, FIN-FSA assesses and takes into account the impact of macroprudential decisions on financial markets, lending and the economy. In such situations, the secondary objective would already be fulfilled on the basis of the existing law and FIN-FSA’s current work. 3.1.7 The explanatory memorandum accompanying the draft law on FIN-FSA clarifies that no new tasks would be assigned to FIN-FSA in order to achieve the secondary objective. 3.1.8 The explanatory memorandum accompanying the draft law on FIN-FSA notes that the secondary objective would enhance FIN-FSA’s effectiveness by requiring FIN-FSA’s procedures and systems to be as efficient as possible, by, for example, streamlining licensing procedures. The secondary objective would require a more detailed assessment of proportionality of FIN-FSA’s regulations and guidelines, also from the perspective of economic growth and market competition. This could in practice imply the assessment of FIN-FSA’s regulations and guidelines from the perspective of simplification and rationalisation. 3.2 Observations on the secondary objective of FIN-FSA 3.2.1 FIN-FSA is the authority responsible for the supervision of Finland’s financial and insurance sectors. As such, the objective of its activities is and should be the resilience and stability of both the individual entities under its supervision and that of the entirety of the Finnish financial system. This is especially the case for the banking sector, which plays a crucial role by providing financial services and products to firms and households and thereby financing and supporting the real economy. 3.2.2 Supervision should focus on ensuring financial stability and bank resilience. This principle stands as one of the key lessons learned from past financial crises, which have been very costly to society. Banks with resilient capital and liquidity positions are essential for the preservation of the stability and smooth functioning of the financial system, especially during periods of stress. Assigning multiple objectives to FIN-FSA risks creating conflicting priorities and trade-offs, which could undermine the important task of fostering and ensuring resilience. 3.2.3 Against this background, based on the explanatory memorandum accompanying the draft law on FIN-FSA, the secondary objective seems to directly target decisions concerning macroprudential measures. This intention may be inferred from the fact that the explanatory memorandum accompanying the draft law on FIN-FSA clarifies that the secondary objective would not apply to individual supervisory decisions concerning supervised entities, which would leave microprudential decisions out of the scope of the objective, which the ECB welcomes. By targeting macroprudential instruments, the provision risks counteracting FIN-FSA’s ability to conduct macroprudential policy in a prudent, timely and effective manner. 3.2.4 As the ECB has previously indicated to the Finnish authorities, national macroprudential authorities must operate within a framework that preserves their operational independence . Introducing a secondary objective (comprising competitiveness, financial intermediation and sustainable economic growth) implies that the authority would be legally required to weigh up economic outcomes, perhaps beyond the cost-benefit analysis underpinning the policy decisions of the supervisor. 3.2.5 Under the existing Law on FIN-FSA – as noted in the explanatory memorandum accompanying the draft law on FIN-FSA – FIN-FSA already assesses and takes into account the effects of macroprudential decisions on the financial markets, lending and the economy. The legislator acknowledges that the proposed objective is already fulfilled under the existing Law on FIN-FSA and by the authority’s current activities. The legislator accordingly itself provides a counterargument against the need to introduce the secondary objective, given that FIN-FSA already embeds such considerations in its macroprudential decision-making. 3.2.6 The legislator seems to be aware of the potential for conflict between objectives as it has clarified in the explanatory memorandum accompanying the draft law on FIN-FSA that the secondary nature of the secondary objective means that it may only be promoted insofar as this is possible without conflicting with the primary objective. Despite this clarification, the ECB warns about the risk of such conflict due to the introduction of a secondary objective in FIN-FSA’s mandate. The introduction of this objective may put the burden of proof on FIN-FSA, which would have to show that the secondary objective had been taken fully into account every time a macroprudential decision is introduced or amended . This may lead to inaction bias, whereby FIN-FSA might hesitate to take appropriate and timely measures to address identified systemic risks for fear of being criticised and held responsible for impeding economic growth. 3.2.7 The International Monetary Fund (IMF) has also continuously emphasised the importance of supervisors having a clear mandate to preserve the resilience, safety and soundness of the banking system and financial stability. In its latest Financial System Stability Assessment and assessment of the implementation of Basel core principles in the euro area, the IMF highlighted in particular a continued need to remain vigilant that the focus on banks’ safety and soundness is not lost in the context of the current debate on the future of the Union economy, where there are some calls (both

10 See paragraphs 2.1 and 2.2 of Opinion CON/2025/31. All ECB opinions are published on EUR-Lex.

11 See e.g. Laki Finanssivalvonnasta (878/2008), Section 3. in the private and public sectors) for financial regulators to explicitly consider the competitiveness of the Union financial sector in their decision-making . The IMF also stressed that preserving the primacy of the objective of the Single Supervisory Mechanism (SSM) will be paramount going forward, as memories of the global financial crisis fade . 3.2.8 In this context, the ECB emphasises that a resilient banking sector where banks adopt sound risk management practices and avoid taking excessive risk fosters competitiveness and supports economic growth in the long term, as banks remain capable of providing credit across the cycle . The primary objective of FIN-FSA already caters for all these aspects. 3.2.9 From a monetary policy perspective, the transmission of monetary policy to the real economy in Finland and in the euro area is largely carried out through the banking system. A sufficiently competitive domestic banking system and efficient financial intermediation is therefore conducive to an effective monetary policy transmission mechanism. In this regard, the prevailing legal framework does not appear to have impeded the proposed secondary objective of maintaining a competitive banking system and promoting financial intermediation. Finnish banks exceed the minimum regulatory ratios, notably in terms of capital requirements, and bank profitability has remained solid in recent years. In fact, FIN-FSA’s primary objective, with its commitment to fostering resilience, is a key driver of confidence in the banking system, reducing funding costs and enhancing competitiveness. 3.2.10 The Eurosystem response to the Commission’s consultation on the competitiveness of the EU banking sector highlights that competitiveness has several dimensions and is shaped by various factors, with resilience, financial integration and scale playing an important role. Its key recommendations are to reduce financial and regulatory fragmentation of the European single market for banking, preserve resilience and tackle undue complexity in regulatory frameworks. Implementing these recommendations would reduce the undue constraints on the competitiveness of Union banks, enhancing their ability to support the real economy while also strengthening their role in efficient monetary policy transmission, with no need for a secondary objective for supervisory authorities. 3.2.11 The ECB understands that the national competent authority in the field of competition in Finland is the Finnish Competition and Consumer Authority (FCCA). While the explanatory memorandum accompanying the draft law on FIN FSA does not indicate the assignment of new tasks relating to competition matters to FIN-FSA under the draft law on FIN-FSA, the ECB emphasises the need to allocate powers to authorities in accordance with their respective objectives . In this regard, the ECB

12 See also IMF (2025), Euro Area Financial System Stability Assessment, Country Report No. 25/203, p. 26, available on the IMF’s website at www.imf.org.

13 IMF (2025), Euro Area Financial Sector Assessment Program (FSAP) - Detailed Assessment of Observance - Basel core principles for effective banking supervision, Country Report No. 25/215, pp. 39 and 40, available on the IMF’s website at www.imf.org.

14 See Governing Council statement on macroprudential policies, 8 July 2026, available on the ECB’s website at www.ecb.europa.eu.

15 ECB, Eurosystem response to the Commission’s targeted consultation on the competitiveness of the EU banking sector, April 2026, available on the ECB’s website at www.ecb.europa.eu.

16 See paragraph 8 of Opinion CON/2005/58, paragraph 4 of Opinion CON/2007/17 and paragraph 4.1 of Opinion CON/2008/44. has highlighted in its previous opinions on draft legislation in other Member States the potential conflict between the objectives of market competition and financial stability . 3.2.12 Furthermore, the draft law on FIN-FSA risks creating overlaps between the objectives of FIN-FSA and the FCCA, where the latter is already mandated to safeguard competition and promote wellfunctioning markets, including financial markets. Although the explanatory memorandum accompanying the draft law on FIN-FSA clarifies that the promotion of the secondary objective outlined above is intended to take place over the long term, the potential for conflict between the primary and secondary objectives risks diluting and weakening the mandate of the competition authority. Therefore, it is important that the objective of promoting competition in the financial markets remains fully within the mandate of the competition authority. This is without prejudice to FIN-FSA’s task of ensuring that regulatory and supervisory requirements apply equally and proportionately to all financial entities active in the financial markets, ensuring a level playing field for all firms concerned.

4. Restricted authorisations for credit institutions

4.1 Purpose of the draft law on credit institutions’ provisions on restricted authorisations for credit

institutions

The draft law on credit institutions amends, inter alia, the chapter of the existing Law on credit institutions on granting and withdrawing of authorisations to take up the business of a credit institution and restrictions of business activities . In particular, the draft law on credit institutions provides for the possibility for an entity to apply for a restricted authorisation as a credit institution upon its own initiative . The explanatory memorandum accompanying the draft law on credit institutions notes that the purpose of this is to allow the applicant to exclude from its application activities that are allowed for credit institutions but which it does not intend to carry out. In such case, the assessment of the conditions for authorisation would focus on business activities that the applicant actually plans to undertake. The explanatory memorandum accompanying the draft law on credit institutions notes that this approach would allow the controlled expansion of the entity’s business activities. The restrictions proposed by the applicant on the authorisation can be included in the draft decision submitted to the ECB by FIN-FSA . 4.2 Observations on the draft law on credit institutions’ provisions on restricted authorisations for credit

institutions

4.2.1 The ECB’s authorisation framework to take up the business of a credit institution is based on the Union concept of a single banking licence under Directive 2013/36/EU of the European Parliament

17 See paragraph 4.2 of Opinion CON/2008/44.

18 Laki luottolaitostoiminnasta (610/2014), Chapter 4.

19 Chapter 4, Section 1 of the draft law on credit institutions.

20 Chapter 4, Section 2 of the draft law on credit institutions; according to Article 4(1), point (a), of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63, ELI: http://data.europa.eu/eli/reg/2013/1024/oj) (hereinafter the ‘SSM Regulation’), the ECB is exclusively competent to carry out, for prudential supervisory purposes, the task of authorising credit institutions. and of the Council (hereinafter the ‘Capital Requirements Directive’ or ‘CRD’), which establishes that the authorisation of a credit institution may cover all activities listed in Annex I of the Directive, provided these activities are included in the institution’s programme of operations and assessed during the authorisation process. This approach reflects the legislator’s intention to establish a broad authorisation framework that avoids fragmented authorisation procedures, allowing credit institutions to undertake all activities permitted to them by the CRD without requiring separate authorisations for each banking service they wish to undertake. 4.2.2 The ECB has also prioritised simplification initiatives to increase the efficiency of supervisory processes, including procedures for authorisation to take up the business of a credit institution. A fragmented authorisation framework requiring separate authorisations for additional activities a credit institution wishes to undertake would introduce unnecessary administrative complexity and inefficiencies, which runs counter to the ECB’s efforts to streamline supervisory processes and achieve supervisory convergence and harmonisation across the Union. A streamlined and harmonised approach to authorisation procedures, under which credit institutions in the Union are authorised to perform all the activities permitted to them by the CRD as part of a single authorisation, reflects the ECB’s commitment to safeguarding resilience while ensuring supervisory efficiency and supporting the effective operation of the single banking authorisation framework in line with its general principles. 4.2.3 Regulation (EU) No 575/2013 of the European Parliament and of the Council (hereinafter the ‘Capital Requirements Regulation’ or ‘CRR’) defines a credit institution as an undertaking, the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account . The ECB therefore understands that, in any case, the possibility to grant a restricted authorisation would not conflict with the obligation stemming from this provision for credit institutions to perform both mandatory core banking activities, namely taking deposits or other repayable funds from the public and granting credits. 4.2.4 Furthermore, as far as the draft law on credit institutions is concerned, while it is clear that a banking authorisation can be restricted upon express request from the applicant, it does not appear equally clear that, in cases where the applicant requests a full banking authorisation to perform all activities permitted by the CRD for credit institutions, FIN-FSA can on its own initiative restrict the authorisation to the specific set of activities the applicant actually intends to perform. It is equally unclear what type of authorisation would be granted in a case where the applicant expressly stated that it intended to develop all activities allowed for credit institutions (universal banking licence) in the future, but also stated that, initially, it intended to focus on only some of the activities permitted by the CRD. In this respect, the ECB understands that FIN-FSA retains the existing power to include in the authorisation proposal restrictions that are necessary for supervision purposes related to the scope of permitted

21 Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338, ELI: http://data.europa.eu/eli/dir/2013/36/oj).

22 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1, ELI: http://data.europa.eu/eli/reg/2013/575/oj). business activities (e.g. excluding certain product lines or customer categories that the applicant has no intention of conducting) . 4.2.5 Likewise, the draft law on credit institutions also does not envisage the possibility of the competent supervisory authority restricting, upon its own initiative, the authorisation of a credit institution that was already in operation under a universal banking licence but did not in fact perform all the activities permitted to credit institutions by the CRD. The ECB therefore understands that the draft law on credit institutions does not provide for the conferral of such power upon the competent authority. 4.2.6 Finally, the ECB understands that nothing in the draft law on credit institutions prevents the granting of a restricted authorisation to a credit institution that is already authorised but which seeks restriction of its authorisation. In that scenario a new authorisation procedure would have to be initiated.

5. Amalgamations of credit institutions

5.1 Purpose of the draft law on amalgamations of credit institutions 5.1.1 The draft law on amalgamations of credit institutions includes several new provisions that are not included in the existing Law on amalgamations of deposit banks, the repeal of which is proposed. For example, it strengthens the steering of the amalgamation by its central organisation by clarifying that the central organisation must issue requirements binding on the member credit institutions. These requirements relate to compliance with regulatory requirements and joint guarantees within the amalgamation, and cover, inter alia, own funds and liquidity, risk management, corporate governance and remuneration, internal compliance, and anti-money laundering and countering terrorist financing . Furthermore, the central organisation can impose binding requirements on the member credit institutions and other entities part of the amalgamation in relation to business principles . 5.1.2 The draft law on amalgamations of credit institutions also broadens the central organisation’s obligation to provide ex ante support to the member credit institutions in order to ensure that the member credit institutions can meet their operational preconditions , as well as the central organisation’s powers relating to its oversight function within the amalgamation. Regarding the supporting measures, the central organisation needs to, for instance, provide capital support to a member credit institution when the fulfilment of its own funds requirements is at risk . The draft law on amalgamations of credit institutions also widens the range of instruments available to provide support to the member credit institutions as compared to the existing Law on amalgamations of deposit banks. 5.1.3 The draft law on amalgamations of credit institutions also introduces more detailed rules on the procedure for voluntary dissolution of the amalgamation with a view to ensuring that the dissolution

24 Currently in Chapter 4, Section 2, of the draft law on credit institutions.

25 Chapter 5, Sections 1 to 4 of the draft law on amalgamations of credit institutions.

26 Chapter 5, Section 5 of the draft law on amalgamations of credit institutions.

27 Chapter 9, Section 1 of the draft law on amalgamations of credit institutions.

28 Chapter 9 of the draft law on amalgamations of credit institutions.

29 Chapter 9, Section 2 of the draft law on amalgamations of credit institutions. is conducted in an orderly manner and that creditors’ interests are safeguarded . 5.2 Observations on the draft law on amalgamations of credit institutions 5.2.1 The draft law on amalgamations of credit institutions is intended to replace the existing Law on amalgamations of deposit banks while maintaining the core principles that the authorisation to operate as the central institution and the authorisation of member credit institutions are to be carried out by the competent authority in the context of the Single Supervisory Mechanism and conform to the rules and principles enshrined in the SSM Regulation, Regulation (EU) No 468/2014 of the European Central Bank (ECB/2014/17) and the CRD and CRR. The draft law provides that the rights and obligations of the central institution, the member credit institutions, and other entities belonging to the amalgamation commence when the central institution has been granted 32 33 authorisation and its rules have been registered. It is noted, therefore, that the authorisation granted to the central institution to operate as such entails the formation of the amalgamation itself, which is contingent on and triggered by granting the central institution's authorisation. 5.2.2 The CRD provides that a decision to grant or refuse authorisation must be taken within 12 months of receipt of the application . The draft law on amalgamations of credit institutions does not specify the consequences of exceeding the 12-month time-limit. The ECB understands that, unlike in other jurisdictions within the Union, a simple failure by FIN-FSA to respond to an application within the prescribed time-limit does not trigger automatic rejection of the application, as FIN-FSA is statutorily required to issue a substantive and reasoned administrative decision in all cases. The draft law envisages instead that in the event of breach of the 12-month period, the applicant’s recourse would be to general administrative remedies – such as a complaint to the supreme overseers of legality (i.e. the Parliamentary Ombudsman or the Chancellor of Justice) or an administrative complaint to the supervisory authority – rather than a specific right of appeal against the delay giving rise to administrative remedies. The ECB understands, therefore, that in such cases the authorisation is not granted, but will not be considered as formally rejected until the competent authority is compelled by the applicant to reach a decision. It is, however, not clear from the draft law whether a decision adopted after the 12-month period has passed could be either positive or negative, taking into account the prescribed maximum time-limit set out in the CRD. In any case, it appears that in order to comply with the purpose of the CRD in avoiding tacit approvals for authorisations to take up the business of a credit institution, a negative decision could always be adopted even after the 12-month period has passed. 5.2.3 The ECB welcomes the clarification that it must be ensured that binding requirements imposed by the central institution on the member credit institutions comply with the CRR, the Law on credit institutions and the provisions, regulations and official decisions issued thereunder that apply to the amalgamation, covering both individual member credit institution-level requirements and those

30 Chapter 4, Sections 4 to 6 of the draft law on amalgamation of credit institutions.

31 Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (ECB/2014/17) (OJ L 141, 14.5.2014, p. 1, ELI: http://data.europa.eu/eli/reg/2014/468/oj).

32 Under Chapter 2, Section 5, of the draft law on amalgamations of credit institutions.

33 Under Chapter 2, Section 8, of the draft law on amalgamations of credit institutions.

34 See Article 15, second paragraph, of the CRD. applied to the amalgamation on a consolidated basis. The binding requirements issued by the central institution must therefore comply with applicable Union and national law. The central institution may impose more stringent requirements than the statutory minimum, as it must ensure compliance at the amalgamation level (including where member bank waivers apply). It may not impose more permissive requirements that conflict with minimum standards set by Union or national law, which means that the binding requirements must ensure compliance with, and not derogate from, applicable legislation. The two-step procedure means that the banking supervisor must first grant an authorisation to the central institution, and only then can the central institution decide on applying the waivers to individual member credit institutions. 5.2.4 The ECB welcomes the clarification in the draft law that the proposals contained therein concerning the level of application of prudential requirements within the amalgamation are based on (a) the relevant provisions of the CRR under which the competent authority may, in accordance with national law, waive the application of certain requirements laid down in the CRR to member credit 36 37 institutions in whole or in part; and (b) the relevant provisions of the CRD , according to which competent authorities may waive certain requirements set out in the CRD with regard to a credit institution permanently affiliated to a central body. 5.2.5 Specifically, in relation to setting minimum own funds requirements, the central institution must obtain authorisation from FIN-FSA before it can validly set member-institution-specific own funds minimum levels that deviate from the CRR. FIN-FSA may, on application, grant the central institution permission to decide that the own funds requirements are applied entirely or only partly at the consolidated level of the amalgamation rather than to individual member credit institutions. Although the previous fixed floor that member credit institutions must hold (80 % of the level that the legislation would otherwise require) is to be abolished, the ECB welcomes the fact that the draft law provides that the levels cannot fall below what is necessary for individual and group viability. The minimum levels set must collectively ensure that the own funds requirements can be met at consolidated level, must not be such as to jeopardise the operating conditions of the member credit institution or the amalgamation itself, and must be justified from the perspective of the member credit institution’s business and risk management, which means that they must not be unreasonably low. Accordingly, no absolute numerical floor is preserved in the draft law, but the central institution remains bound by substantive adequacy criteria that prevent levels from being set so low as to compromise soundness at the amalgamation level. 5.2.6 The ECB further welcomes the fact that the supervisory authority will maintain oversight in respect of the capital guidance defined by the central institution within the amalgamation. The granting of member credit institution waivers continues to follow a two-step model, under which the competent supervisory authority first grants the central institution permission to grant waivers, after which the central institution decides on the application of those waiverswithin the amalgamation. This ex ante supervisory permission is a precondition to any own funds waivers being operational, but FIN-FSA

35 See Article 10 of the CRR.

36 See Parts 2 to 8 of the CRR.

37 See Article 21 of the CRD. still maintains ongoing supervisory powers to perform ex post assessments of the adequacy and compliance of the capital guidance with the applicable legal conditions. Accordingly, FIN-FSA may restrict a permission already granted if the central institution is unable to ensure that the authorisation conditions and other statutory requirements are met. FIN-FSA may also revoke the permission if restricting it would not be a sufficient measure to attain the objective of achieving regulatory compliance. Additionally, within the amalgamation, if the minimum own funds level of a member credit institution is breached or at risk of being breached, the central institution must notify FIN-FSA, and immediately draw up a plan together with the member credit institution for building up own funds, which is a mechanism that also confers upon the supervisor an ongoing trigger to act postauthorisation. 5.2.7 The draft law on amalgamations of credit institutions provides that voluntary dissolution of an amalgamation necessarily implies the withdrawal of the authorisation of the central institution itself. The ECB welcomes the express provision in the draft law on amalgamations of credit institutions that allows FIN-FSA, upon the application of the central institution, to withdraw the central institution’s authorisation once a decision on the dissolution of the amalgamation has been made and the criteria for the voluntary dissolution are met (e.g. safeguarding creditors and the member credit institutions’ financial soundness). However, the draft law on amalgamations of credit institutions lacks clarity regarding the legal consequences of creditor objections in the context of the voluntary dissolution of an amalgamation and the withdrawal of the central institution’s authorisation. While creditors whose claims arose prior to the issuance of the notice have the right to object, the draft law does not specify the procedural or substantive implications of such objections for the dissolution process. To ensure legal certainty, the draft law on amalgamations of credit institutions should explicitly state whether all creditor objections must be formally resolved before the dissolution can be approved by FIN-FSA and the ECB as competent authorities. The draft law should also clarify whether unresolved objections require adjudication by national courts or other dispute resolution mechanisms and establish clear criteria for assessing the validity of objections and the timeline for their resolution. The absence of such provisions may create ambiguity and undermine the procedural integrity of the withdrawal of the authorisation. Therefore, the draft law should clarify whether the dissolution cannot take effect until all creditor objections are conclusively resolved, ensuring that the rights and protection of creditors are upheld throughout the process. 5.2.8 The ECB welcomes that the withdrawal of a member credit institution from membership of the central institution may only occur if it does not cause the prudential requirements applicable to amalgamation – in particular own funds requirements – fall below the required level at the consolidated level of the amalgamation or otherwise jeopardise the operating conditions of the amalgamation or of the withdrawing member credit institution or the position of its depositors or other creditors. 5.2.9 Finally, the ECB welcomes the clarification contained in the draft law on amalgamations of credit institutions that, to the extent that supervisory tasks have been transferred to the ECB under the SSM Regulation, the ECB would act as the competent supervisory authority referred to in the draft law, instead of FIN-FSA.

6. Miscellaneous provisions in the draft law on credit institutions

6.1 The draft law on credit institutions lifts the national restrictions on the ownership of real estate by credit institutions currently stipulated in the existing Law on credit institutions , considering them unnecessary in view of the existing regulation of concentration risk, credit risk, qualitative risk management, and the different supervisory powers available to limit and manage risks. The ECB understands that the restrictions to be lifted are exclusively based on national provisions establishing more restrictive conditions compared to those already present in Union law that would therefore continue to fully apply. 6.2 The draft law on credit institutions also repeals the requirement contained in the existing Law on credit institutions that foreign credit institutions would have to base their activity on Finnish territory on a permanent establishment. This implies that such credit institutions must establish a branch in Finland. The ECB welcomes the repeal of this requirement, particularly considering that credit institutions established within the Union are allowed to perform their activities in the territory of other Member States via the exercise of their freedom to provide services without establishing a branch, as determined in the CRD .

This opinion will be published on EUR-Lex.

Done at Frankfurt am Main, 31 August 2026.

[signed]

The President of the ECB

Christine LAGARDE

39 Laki luottolaitostoiminnasta (610/2014), Chapter 5, Sections 3 and 4.

40 Laki luottolaitostoiminnasta (610/2014), Chapter 5, Section 9.

41 See Articles 33 and 39 of the CRD.