Finland lowers bank buffers in coronavirus response, prepares to close borders (updated)

Viking Line Abp

17/03/2020 15:18

(Releads with financial authority's measures)
    By Anne Kauranen and Tarmo Virki
    HELSINKI, March 17 (Reuters) - Finland decided late on
Tuesday to lower buffer requirements of its banks, attempting to
boost the slowing economy, as the country prepared to close its
borders as part of the response to slow the spread of the
coronavirus.
    Finland will start restricting traffic over its borders on
Thursday, Interior Minister Maria Ohisalo said.
    "Goods and cargo transports will continue across all
borders. Indispensable work-related travelling will still be
possible and continues within EU borders," Ohisalo told a news
conference.
    Permanent residents would be allowed to return and foreign
travellers permitted to leave Finland, Ohisalo said.
    Travelling abroad should be avoided and the restrictions
were valid until April 13, the government said, with passenger
railway traffic between Finland and neighbouring Russia ending
on Wednesday.
    Ferry firms Viking Line  VIK1V.HE  and Tallink  TAL1T.TL ,
which link Finland to Sweden and Estonia, both said they would
stop operating Helsinki-Stockholm ferries and cut back on the 
Helsinki-Tallinn route, which was used last year by 8.8 million
people.   
    Finland's health authority had confirmed 319 coronavirus
cases but no deaths by Tuesday, but it said the total number was
not reflective of actual cases as testing has been limited to
certain groups only since last week.
    The financial supervisory authority (FSA) said its decision
to lower buffer demands would increase banks lending capacity by
52 billion euros ($57.2 billion).
    The FSA said it would closely monitor that banks are
targeting relief measures to mitigate the effects of the
economic crisis and not on bonuses or dividends.    
    "In the current very exceptional circumstances, it is
justified to reduce the buffers in order not to weaken the
ability of credit institutions to lend, especially to the
corporate sector," FSA said.
    Earlier on Tuesday economic research institute ETLA said    
   Finland's gross domestic product will fall between 1% and 5%
this year because of the impacts of the coronavirus pandemic,
with the most negative scenario as the most likely outcome.
     ($1 = 0.9087 euros)

 (Reporting by Anne Kauranen and Tarmo Virki; Editing by Jon
Boyle and Grant McCool)
 ((anne.kauranen@thomsonreuters.com; +358925166112;))