Financial asset management and social responsibility
The objective of the Bank of Finland’s financial asset management is to meet the liquidity, security and return requirements placed upon the central bank in respect of the assets managed. In pursuit of these requirements, the Bank takes into account the risks and social responsibility aspects of its investment activities.
In managing its financial assets, the Bank of Finland secures the value of the assets and its ability to support the liquidity of the banking system, whenever necessary. The Bank of Finland’s capital adequacy is sufficient to cover the risks arising from the performance of its tasks.
At the end of 2018, the Bank of Finland’s financial assets amounted to around EUR 11.5 billion. They comprised direct foreign currency-denominated and euro-denominated fixed-income investments, investments in equity and real estate, and gold holdings and items denominated in IMF Special Drawing Rights (SDRs).
Environmental issues and social responsibility reflected in activities
In its investment activities, the Bank of Finland takes into account environmental and social responsibility issues. In 2018, the Bank adopted an updated responsible investment strategy for its financial asset investments. It also participates actively in public debate on responsible investment.
In the operations of the Bank of Finland, the largest environmental burden derives from real estate, cash supply and travel. The Bank has successfully reduced emission levels by changing operating practices and introducing new technologies in the workplace. The Bank of Finland also entered into environmental cooperation with other European central banks.
Risks caused by climate change must be acknowledged and identified
Climate change creates two types of financial stability risks: material losses resulting from extreme weather conditions and transition risks caused by exit from high-carbon business models. In 2018, the Bank of Finland joined a network for central banks and supervisors aimed at identifying risks related to climate change and enhancing the role of sustainable finance.