Financial Institution Security in Estonia: A Strong Foundation
Estonia’s financial sector is under the watchful eye of Finantsinspektsioon, a powerful regulatory body with autonomous powers and a budget. As an independent entity working on behalf of the Estonian state, Finantsinspektsioon is responsible for ensuring the stability of the country’s financial system.
Mandate and Oversight
With a broad mandate, Finantsinspektsioon oversees:
- Banks
- Insurance companies
- Insurance intermediaries
- Investment firms
- Fund managers
- Investment and pension funds
- Payment institutions
- E-money institutions
- Creditors
- Credit intermediaries
- Securities market
All of these entities must operate under licenses granted by Finantsinspektsioon.
European Single Supervisory Mechanism (SSM)
As a key player in the European Single Supervisory Mechanism (SSM), Finantsinspektsioon has been instrumental in monitoring capital levels at major banks and banking groups across Europe since 2014. Additionally, it is part of both:
- European Single Resolution Mechanism (SRM)
- Single Resolution Board
This gives Finantsinspektsioon a critical role in crisis resolution.
Crisis Resolution Work
Since its inception in 2015, Finantsinspektsioon has taken on responsibility for crisis resolution work as the supervisory institution. This includes working with other European authorities to ensure the stability of the financial system.
International Supervision
Notably, supervision over branches of banks, insurance companies, and investment funds operating in Estonia is exercised by the home country’s regulatory authority, ensuring that these international entities are also held to high standards.
By exercising strict oversight and working closely with other European authorities, Finantsinspektsioon provides a strong foundation for financial institution security in Estonia.