Luottolaitokset

Luottolaitokset, or credit institutions, are financial institutions that are authorized to accept deposits from the public and to provide credit. In Finnish regulation and EU law, the term covers banks and other entities that take deposits or other repayable funds and grant loans or credits. Typical examples include commercial banks, savings banks, and cooperative banks. Entities whose primary activity is investment services rather than deposit-taking are typically not classified as luottolaitokset.

Regulation and supervision: Credit institutions are subject to prudential supervision to ensure their stability and soundness. In Finland, the Financial Supervisory Authority (FIN-FSA) licenses and supervises most credit institutions operating in the country. Within the European Union’s Single Supervisory Mechanism framework, the European Central Bank directly supervises those credit institutions that are considered significant, while smaller institutions remain under national authorities but are coordinated within the SSM.

Capital, liquidity and risk management: Credit institutions must meet minimum capital requirements, maintain adequate liquidity, and implement robust risk management and governance practices. They report to the supervising authorities and are required to have effective internal controls and risk assessment processes.

Deposit protection: Credit institutions participate in the national and EU-wide deposit guarantee schemes, which protect depositors up to a defined threshold per bank. This provides a safety net for individuals and contributes to financial stability.

Role in the economy: Luottolaitokset facilitate everyday payments, mobilize household and corporate savings, and provide credit for households and businesses. They are central to financial intermediation, competition among lenders, and overall financial stability in Finland and the broader EU.