The Riigikogu heard the Annual Report of the Financial Supervision Authority

Chairman of the Management Board of the Financial Supervision Authority Kilvar Kessler, who also had given the Riigikogu an overview of the work done in 2024 and in earlier years, pointed out that the annual reports presented to the Riigikogu set out four important issues on Estonia’s financial market. “First, mergers of companies in the financial market, alongside rapid growth of new banks and other financial intermediaries, a review of business models and moving away from non-transparent business practices, and successful risk mitigation in crises, like the ID-card crisis, COVID crisis and the initial phase of hot war in Ukraine,” the head if the Financial Supervision Authority said.

Among other things, Kessler explained that at the end of last year, one of the region’s largest banks, Sweden’s SEB, announced that it had decided to merge its Estonian, Latvian, and Lithuanian banks into a single entity and to bring the Baltic headquarters to Estonia. “This headquarters will not be established in Riga, nor in Vilnius, but here, in Tallinn. And this clearly demonstrates confidence in Estonia’s financial supervision,” he noted, adding that seven years ago, the Financial Supervision Authority had also convincingly demonstrated the best business environment to Luminor, which established a new bank, the headquarters of the merged bank, in Tallinn.

The head of the Financial Supervision Authority predicted that these mergers would also encourage other credit institutions operating across the Baltic region to review their structures. “Our financial supervision operates professionally, objectively, and transparently. I think that it would be unreasonable for the state not to use the work of the Financial Supervision Authority in shaping our business environment when selling Estonia’s favourable environment to investors. Tallinn and Estonia as banking centre clearly gives the foreign investors a signal of the suitability of the environment here, provides work for our financial experts, and, under certain conditions, increases competition. This can have a snowball effect in a good sense,” he said.

Secondly, Kessler addressed the legal framework and overregulation on the one hand, and the diversification of the supervisory toolbox, including issues related to the size of fines and to procedures, on the other. Thirdly, he outlined the work being done in new areas of financial supervision, such as the establishment of euro area banking supervision and crisis resolution and integration into its activities, supervision of credit providers, supervision of crowdfunding, supervision of credit collectors, and supervision of crypto-asset markets.

Fourthly, the head of the Financial Supervision Authority emphasized the maturation of the Financial Supervision Authority, the establishment of a crisis resolution function from zero, the merger of the Guarantee Fund with the Financial Supervision Authority for the sake of more efficient operation, and the achievement of outstanding results with very modest resources in the financial education of young people. Kessler assured that over the years, the Financial Supervision Authority had grown into one of the most efficient and effective institutions in Estonia. “We have fulfilled the tasks assigned to us in accordance with the law on a risk-based basis, we have implemented the current strategy, we have kept the financial sector running smoothly and the risks mitigated. We have not lost a single important court case. Our employees hold the Financial Supervision Authority in very high regard as an employer, and our staff turnover is low. We have achieved all this by acting decisively, professionally, and with an open mind,” he said.

During the debate, Maris Lauri (Reform Party) and Andre Hanimägi (Social Democratic Party) took the floor on behalf of their parliamentary groups.

Verbatim record of the sitting (in Estonian)

Video recording will be available on the Riigikogu YouTube channel.

Riigikogu Press Service
Maris Meiessaar
+372 631 6353, +372 5558 3993
maris.meiessaar@riigikogu.ee
Questions: press@riigikogu.ee

Link uudisele: The Riigikogu heard the Annual Report of the Financial Supervision Authority

Source: Parliament of Estonia