Norwegian Finanstilsynet supports CRR-aligned reform of savings banks capital structure and equity certificate rules and ending customer dividends

Norwegian Finanstilsynet published its consultation response to the Savings Bank Committee’s proposals, backing changes to savings banks’ capital structure and the rules for equity certificates so they comply with the Capital Requirements Regulation (CRR). It also supports easing requirements for conversion into a joint-stock savings bank and endorses abolishing savings banks’ ability to distribute customer dividends. The proposed reforms aim to remove uncertainty about whether Common Equity Tier 1 requirements are met and to simplify the current structure, including through a new ownership share model, which Finanstilsynet supports. The supervisor wants a stronger link between the relative size of owner capital and equity certificate holders’ influence, while retaining a cap on that influence. While agreeing in principle with equal treatment of the three bank corporate forms, it argues that authorities should retain the ability to set minimum ownership requirements for savings bank foundations in equity certificate banks and joint-stock savings banks, and it supports strengthened regulation of the foundations, which are expected to grow in scale. Finanstilsynet plans to engage with the European Banking Authority on the proposed changes and the further process, in light of consultation input and Norway’s Ministry of Finance assessment.