The Finnish Financial Supervisory Authority FIN-FSA confirmed that it regards the bonds issued by Municipality Finance Plc (MuniFin) as HQLA Level 1 liquid assets.
The definition of Level 1 assets are outlined in the European Commission’s delegated act with regards to liquidity coverage requirement (LCR) for credit institutions.
Finnish FSA’s confirmation was published on March 24, 2015. The statement is based on the fact that MuniFin is a credit institution established and owned by the Finnish public sector and that the bonds issued by MuniFin are guaranteed by the Municipal Guarantee Board, which is a public sector entity guaranteed by the Finnish local government sector with fiscal autonomy to raise and collect taxes.
The definition is a result of MuniFin’s request from November, 2014 to receive a statement on whether the bonds issued by MuniFin can be treated as highest HQLA Level 1 assets from the investors’ point of view.