Aggregated News From Investment Management Regulators

Statement by the Central Bank of Iceland Financial Supervision Committee on assessment of risk in financial institutions’ operations


Please complete the required fields.

Central Bank of Iceland

The Financial Supervisory Authority of the Central Bank of Iceland (FSA Iceland) assesses key risks in financial institutions’ operations through the so-called supervisory review and evaluation process (SREP). The SREP assessment takes place according to provisions in the Act on Financial Undertakings, No 161/2002. For Iceland’s three systemically important banks – Arion Bank hf., Íslandsbanki hf., and Landsbankinn hf. – the assessment is undertaken each year, while for other institutions it is carried out every two to three years.

The SREP assessment for the three systemically important banks had already begun in March, when the COVID-19 pandemic reached Iceland. The pandemic and the various public health measures that have been necessary in Iceland have changed the operational conditions of banks and many other financial institutions. Furthermore, economic uncertainty has increased substantially, making it unusually difficult to determine asset quality and assess other risks in the banks’ operations for the time being.

In its 8 April 2020 statement, the Financial Supervision Committee says the following about the SREP: “Systemically important banks are currently conducting their annual supervisory review and evaluation process (SREP). In view of the ongoing difficulties, final decisions on capital requirements will presumably be made based on financial statements later this year rather than as of year-end 2019. Furthermore, no conventional stress test will be conducted at this time in connection with SREP.”

The Financial Supervision Committee has now decided that the results of the 2019 SREP assessment concerning additional capital requirements (Pillar II-R) shall remain unchanged. Developments in key risks in the banks’ operations will be monitored closely in coming months. The additional capital requirement will be reviewed if need be, but no later than during the 2021 SREP.

In addition to the determination of the need for additional capital, the SREP entails a review of factors such as the viability and sustainability of the business model, internal governance, operational risk and management and control of credit risk, concentration risk, market risk and interest rate risk in the banking book, and liquidity and funding risk. Even though it has now been decided that the additional capital requirement will remain unchanged, comments and requests for improvement with regard to the above-listed factors will be communicated to the banks as the need arises.

The next regular SREP assessment for the systemically important banks is set to begin late this year.

Source link

Regulator Information

Regulator Name: Central Bank of Iceland
Abbreviation: CB IS
Jurisdiction: Iceland

Recent Articles

Directive for the beneficial ownership register of express trusts and similar legal arrangements

See the Press Release published by the Cyprus Securities and Exchange Commission (CySEC CY) here: Source link


Attention! The FMA warns investors against concluding transactions with: RichmondSuper (Link to external page. Opens in new window.) [email protected] [email protected] [email protected] [email protected] [email protected] (Link to external page. Opens in new window.) This provider...

Hardson Becker Global

Attention! The FMA warns investors against concluding transactions with: Hardson Becker Global with its registered address apparently in Hangzhou, China This provider is not authorised to carry...

“Let’s talk about money” – money laundering: how illegal assets are given a legal appearance

In the latest edition of its consumer information series, “Let’s talk about money” the Austrian Financial Market Authority (FMA) explains about the term money...

Chair Powell will host town hall with educators August 2, 2021 at 4 p.m. EDT

Please enable JavaScript if it is disabled in your browser or access the information through the links provided below.

Get the latest from Regulatory.News in your inbox!