European Central Bank names Luminor Bank AS a significant bank

14/02/2018

The Governing Council of the European Central Bank (ECB) named Luminor Bank AS a significant bank, which means that the bank is now subject to direct supervision by the European Central Bank.

120 significant banks operating in the countries participating in the Single Supervisory Mechanism (SSM) are now subject to direct supervision by the ECB, including Swedbank and SEB Bank from earlier. Three banks operating in Estonia are now in the list.

The competency of the ECB and the national supervision authority divides according to the classification of a bank. The ECB exercises direct supervision over credit institutions that are significant according to the criteria of the Single Supervisory Mechanism Regulation. Approximately 82% of the assets of eurozone banks belong to these banks. National supervision authorities supervise other, less significant banks.

The significance of credit institutions is determined according to the criteria set forth in Article 6 of the Single Supervisory Mechanism Regulation, considering the total value of the credit institution’s assets, its importance for the economy of their state of location or the European Union as a whole, the significance of cross-border activities as well as whether the credit institution has requested or received financial assistance from the European Stability Mechanism (ESM) or the European Financial Stability Facility (EFSF).
The purpose of the Single Supervisory Mechanism is to guarantee single and strong capital supervision by way of cooperation between the ECB and the supervision authorities of states. The authority that supervises banks and cooperates with the European Central Banks in Estonia is the Financial Supervision Authority, which also supervises all other Estonian banks.

The Single Supervisory Mechanism supervises compliance with capital supervision legislation, leads the on-site and remote inspections of banks subject to direct supervision, implements sanctions and so on. In addition to this, additional capital requirements may be established to banks subject to direct supervision within the scope of the Single Supervisory Mechanism. Read more about the Single Supervisory Mechanism on the SSM website. 

Nordea Bank AB Estonia branch operates under the name Luminor Bank AS as of 1 October 2017 after merging with AS DNB Pank.

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