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TALLINN – The supervisory board of the Estonian Financial Supervision Authority has approved the Financial Supervision Authority's budget in the amount of approximately 7.3 million euros for the current year and also given its nod to the supervision strategy for 2019-2021.
The budget is bigger by 5 percent than the budget for 2018, mostly as a result of increased volumes of supervision activity. For instance, starting from 2019, the Financial Supervision Authority conducts supervision over Luminor Bank AS and its branches abroad, while also the need for anti-money laundering supervision has increased. The Financial Supervision Authority is about to hire additionally 13 specialists in 2019, spokespeople for the Financial Supervision Authority said on Monday.
The new strategy places activities to combat money laundering and terrorist finance, preparing oneself for better management of risks, and cyber security in the focus of the activities of the Financial Supervision Authority.
Finance Minister Toomas Toniste, chairman of the supervisory board of the Financial Supervision Authority, said that the Estonian FSO will expand its activity in combating money laundering and terrorist finance further still in the future.
"Hand in hand with the openness of our economic environment, globalization of the financial sector and technical development of financial services go risks, where money earned by dishonest means may seek for opportunities to make use of the Estonian financial system. Under conditions like this it is of utmost importance that our financial intermediaries apply appropriate diligence and financial supervision be as effective as possible. In addition, we need to pay attention to entirely new sources of risk such as various crypto-currency related services and companies offering relevant trading platforms," Toniste said.
The chairman of the board of the Financial Supervision Authority, Kilvar Kessler, said that the aim of the agency is for the Estonian financial market to be stable, trustworthy and innovative, and that due to this the new strategy entails several challenges.
"A changed external environment, significantly broader powers of the Financial Supervision Authority and increasing numbers of subjects of supervision pose a challenge when it comes to better management of risks related to market participants. We will pay more attention still to strengthening the crisis framework, efficiency of the internal control systems of market participants and the existence of sufficient buffers to hedge risks," Kessler said.
The objective of innovation set forth in the strategy mostly deals with challenges having to do with market participants, such as the need for a review of outdated rules and updating the information technology infrastructure. The new strategy places greater emphasis on readiness to deal with risks arising from a slowdown of economic growth. In that connection, the strategy defines as goals a well-functioning safety network of the financial market, market participants' sufficient buffers, and a responsible policy of enforcement by the Financial Supervision Authority.
In view of the risks revealed during the previous strategy period from 2016-2018 and trends in digitalization, the Financial Supervision Authority will place greater emphasis still on supervision over the field if information and communication technology of the financial sector. It will also step up supervision over pension fund products, which is prompted by trends related to economic growth, the risk of asset revaluation and the system's becoming increasingly transnational.