International cooperation

The financial markets are international, and principles for regulations and supervision are prepared at the global level and in the EU. Finanstilsynet therefore collaborates with other authorities both globally and within the EEA on the supervision of the financial markets and financial institutions.

Global collaboration

There is global cooperation between states and authorities to develop principles for regulations and supervision of financial institutions and financial markets. Finanstilsynet participates in a number of international organisations and working groups. Several of these are described in further detail on Finanstilsynet’s website.

The IMF’s review of the Norwegian financial system

The International Monetary Fund (IMF) regularly reviews the financial system of member states by conducting a Financial Sector Assessment Program (FSAP).
The programme enables the IMF to assess:

• the main risks and vulnerabilities in the financial system in the short term. Stress testing of the banking system is an important part of this assessment.
• the authorities’ policy to ensure financial stability through regulations and microprudential and macroprudential supervision.
• the authorities’ ability to respond to and solve a financial crisis.

The IMF assessed the financial system in Norway in 2019 and 2020, which included visits in October 2019 and January/February 2020. Finanstilsynet had a number of meetings with the IMF during these visits, providing information and data. During its visits, the IMF also had meetings with the Ministry of Finance, Norges Bank, ØKOKRIM (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime), Finance Norway, the Norwegian Banks' Guarantee Fund and selected institutions supervised by Finanstilsynet. The IMF published the final reports from its assessment in August 2020.

Cooperation within the EEA

European Supervisory Authorities

In 2020, Finanstilsynet gave priority to cooperation within the EEA in lieu of other international (global) cooperation, especially the cooperation with the European Supervisory Authorities

• European Banking Authority (EBA)
• European Securities and Markets Authority (ESMA)
• European Insurance and Occupational Pensions Authority (EIOPA)
• European Systemic Risk Board (ESRB)

Finanstilsynet is a member of the European Supervisory Authorities along with the other national financial supervisory authorities in the EEA countries. This is stipulated in the EEA Agreement. The EEA EFTA states are not entitled to vote as members of the bodies that make decisions, and the European Supervisory Authorities cannot make decisions directly aimed at the EEA EFTA states. In 2020, Finanstilsynet was represented at all meetings of the Boards of Supervisors of EBA, ESMA and EIOPA, as well as at the meetings of the General Board of the ESRB. Due to the Covid-19 pandemic, there was more extensive meeting activity than normal in the Boards of Supervisors and in the ESRB. Finanstilsynet also attended meetings of a number of sub-committees that prepare matters for the Boards of Supervisors, as well as in meetings of the ESRB’s Advisory Technical Committee.

The European Supervisory Authorities’ legislative work

The overarching legislation is generally prepared and adopted in the EU by the European Commission, the European Council and the European Parliament, while Finanstilsynet
and other national financial supervisory authorities, through their participation in the European Supervisory Authorities, are involved in preparing proposals for supplementary rules. The European Supervisory Authorities are also asked to provide feedback on the work on overarching EU legislation.

The European Supervisory Authorities’ work on supervisory practices

The European supervisory cooperation monitors and manages financial market risk at the European level. The financial supervisory authorities in all EEA countries report financial market figures to the European Supervisory Authorities, which form the basis for overarching analyses and the assessment of possible measures. Finanstilsynet provided such regular reporting from the Norwegian financial market in 2020.
Finanstilsynet takes part in so-called supervisory colleges for large cross-border groups. This is a cooperative effort with financial supervisory authorities from other countries where the financial group is established. Read more about reporting and supervisory colleges in the chapters on institutions under supervision.

The European Supervisory Authorities assesses what are good supervisory practices. In 2020, several guidelines were established on such practices at the European level. Finanstilsynet considered which guidelines should be followed in Norway and published the guidelines on its website.

The national financial supervisory authorities in the EEA conduct peer reviews. The supervisory practices of the various countries are examined, and the supervisory

authorities provide advice on adaptations and best practices. Finanstilsynet participated in a number of such peer reviews in 2020. The reports issued after the reviews are published on the websites of the European Supervisory Authorities. As the supervisory authorities in Europe have different approaches to risk-based supervision and priorities, this type of review can be challenging in terms of both resource use and conclusions about recommended methodologies, particularly for small supervisory authorities such as Finanstilsynet.

The European Supervisory Authorities were established ten years ago, Since then, there has been a growing ambition at European level to coordinate regulatory and supervisory practices for the financial markets. In 2020, ESMA took the initiative to and conducted a number of Common Supervisory Actions (CSAs). This implies that all countries should conduct supervisory activities in the same way, at the same time and based on a common methodology. ESMA determines both the design, scope, implementation and reporting of such supervision. This is very challenging and resource-demanding for Finanstilsynet, reducing its flexibility and scope of action with respect to supervisory priorities and methods.

Collaboration on audit oversight

In 2020, Finanstilsynet was an observer in the European collaboration between audit regulators, the Committee of European Auditing Oversight Bodies (CEAOB). In addition to cooperation on supervisory methods and harmonised practices, the committee registers supervisory reports concerning auditors in a common European database, which is a useful basis for the supervision of the largest auditing firms and for communication with the standard setters.

EU legislation becomes EEA obligations and Norwegian legislation

EU legislation in the financial area is normally incorporated into the EEA Agreement and implemented in Norwegian laws or regulations. Finanstilsynet is involved in the preparations, inter alia through its participation in the EFTA cooperation, where EEA EFTA states consider whether the regulations are EEA relevant and whether there is a need for adjustments. In Norway, the Ministry of Finance is responsible for this process.

The incorporation of EU legislation in the financial area into the EEA Agreement has been delayed for a long time. In 2020, 72 EU directives and regulations concerning the financial market were incorporated into the EEA Agreement. At the end of 2020, some 80 legislative acts in the financial area had been adopted in the EU but had yet to be incorporated into the EEA Agreement.

Brexit

In 2020, there was uncertainty related to whether the UK would withdraw from the EU with or without a permanent agreement. The UK left the EU on 31 January 2020, and relations between the EU and the UK were thereafter regulated by a transitional arrangement ending on 31 December 2020. On 24 December 2020, the EU and the UK agreed on a permanent agreement regulating the relations between the parties.

Finanstilsynet’s preparations for Brexit in 2020 were based on the contingency planning carried out in 2018 and 2019. Specific adjustments were made after the UK ceased to be an EEA country from 31 January 2020 and at the expiry of the transition period on 31 December 2020. This process included updating Finanstilsynet's registers to exclude UK firms doing business in Norway on an EEA cross-border basis, following up Norwegian firms doing business in the UK and providing information on Finanstilsynet’s website about the consequences of the UK’s exit from the EEA.

In 2020, the EU passed two equivalence decisions for the UK, both of which have been included in the EEA Agreement. This type of decision sets forth that the supervisory and/or regulatory regime in a given area in a third country is to be deemed equivalent to the corresponding EU regime, which could make it easier for third country firms to conduct business in the EEA. This work was given priority in order to help to ensure a more seamless transition to UK/EEA cooperation from the time the transitional period for the interim agreement expired. In the financial area, these decisions have been of most practical significance for the securities market post-Brexit, and Finanstilsynet has been following this work closely through the European Supervisory Authorities.

Nordic and Nordic-Baltic cooperation

A number of financial institutions offer services in other Nordic countries through subsidiaries and branches and through cross-border operations. In such an integrated Nordic financial market, close cooperation between supervisory authorities is important. The financial supervisory authorities in the Nordic countries have annual meetings both at top management level, for the various supervisory areas, for legal and administrative matters and for a number of other special areas.

Permanent cooperation meetings have also been established with other Nordic supervisory authorities in the fields of auditing and real estate broking. In most countries, these areas are not subject to supervision by the national financial supervisory authority.

Finanstilsynet participates in the Nordic-Baltic Stability Group. This group has representatives from the finance ministries, central banks and financial supervisors in the Nordic and Baltic countries. The group has drawn up a framework for coordination of measures in the various countries in the event of a crisis situation at systemically important cross-border financial institutions.

Finanstilsynet participates in the Nordic-Baltic Macroprudential Forum (NBMF) and NBMF sub-groups. The forum brings together the top management at central banks and financial supervisors and discusses macroprudential surveillance and other supervisory activity in the Nordic-Baltic area.

Along with the other supervisory authorities in the region, Finanstilsynet participates in a Nordic-Baltic anti-money laundering working group and in a Nordic-Baltic working group on PSD 2 and fintech.

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International organisations and committees in which Finanstilsynet participated in 2020

Cross-sectoral

• European Systemic Risk Board (ESRB)
• The Joint Committees of the EBA, ESMA and EIOPA
• EFTA Working Group on Financial Services
• Nordic-Baltic Macroprudential Forum
• Nordic-Baltic Stability Group
• Nordic-Baltic Anti-Money Laundering Working Group
• Nordic-Baltic Working Group on PSD 2 and Fintech
• Financial Stability Board (FSB), Regional Consultative Group for Europe
• Financial Action Task Force (FATF) – the international forum for measures for combating money laundering and terrorist financing, with its secretariat in the OECD
• FinCoNet, Financial Consumer Network
• LEI ROC, Regulatory Oversight Committee, Global Legal Entity Identifier (LEI) System
• Integrated Financial Supervisors Conference – annual conference
• Network for Greening the Financial System (NGFS)

Banking and finance

• European Banking Authority (EBA)
• Basel Consultative Group (Basel Committee)
• Macroprudential Supervision Group (Basel Committee)

Insurance and pensions

• European Insurance and Occupational Pensions Authority (EIOPA)
• International Association of Insurance Supervisors (IAIS)
• International Forum of Insurance Guarantee Schemes (IFIGS)

The securities area

• European Securities and Markets Authority (ESMA)
• International Organization of Securities Commissions (IOSCO)
• Enlarged Contact Group on Supervision of Collective Investment Funds (ECG)

Auditing

• Committee of European Auditing Oversight Bodies (CEAOB)
• International Forum of Independent Audit Regulators (IFIAR)

ICT supervision

• Information Technology Supervision Group (ITSG) – global supervisory collaboration on ICT risk in the financial sector
• Financial Information Sharing and Analysis Center (FI-ISAC) – forum where the banking sector, prosecuting authorities and computer emergency response teams (CERTs) share information on cybercrime in the financial sector