meta_id 3029362

On April 2, 2026, the Financial Supervisory Authority (FIN-FSA) published a thematic review examining procedures concerning related party and close circle lending among credit institutions under its direct supervision. The review assessed compliance with Chapter 15, Section 13, and Chapter 5, Section 15 of the Credit Institutions Act (610/2014), as well as the European Banking Authority (EBA) Guidelines on internal governance (EBA/GL/2021/05) regarding the maintenance of related party registers, the granting of loans to related parties, and the internal control framework. The FIN-FSA identified several deficiencies across the sampled institutions. Banks' internal guidelines for related party registers and related party lending were found to be partially deficient or inconsistent, particularly concerning the management of conflicts of interest, loan-granting procedures, and documentation of processes and responsibilities. The authority noted shortcomings in verifying related party information against external sources, especially regarding the investigation of potential company affiliations of natural persons in the close circle. Related party registers are generally maintained separately from core banking systems with manual data transfers performed with delays. Risk assessments for related party loans followed standard credit risk processes without specific considerations for related party lending, such as conflicts of interest or reputational risk. Decision-making regarding related party loans was partially delegated from the board of directors to lower levels without clearly defined thresholds. Additionally, reporting to the board of directors on related party lending was found to be either insufficiently detailed or completely absent in some instances. The FIN-FSA expects supervised entities to remediate the identified deficiencies and has issued bank-specific supervision letters to address these findings. The observations will inform the authority's future supervisory targeting.