Influence and cooperation
3.4 Bank of Finland and international cooperation
International cooperation is an important part of the Bank of Finland’s work. The Bank participates in the work of international and European institutions and committees and cooperates closely with the national central banks of other countries.
Bank of Finland is responsible for Finland’s relations with the International Monetary Fund
The International Monetary Fund (IMF) is an organisation of 189 member countries, working to foster international cooperation, foreign trade, sustainable economic growth and financial stability. The Bank of Finland is responsible for Finland’s relations with the IMF.
The Governor of the Bank of Finland, Olli Rehn, has been Finland’s representative on the highest governing body of the IMF, the Board of Governors, since 1 November 2018.
The Bank of Finland also influences the activities of the IMF via the Nordic-Baltic constituency’s joint representative on the Executive Board of the IMF. The Bank of Finland and the Finnish Ministry of Finance participate in preparation of the constituency’s policy positions in matters discussed by the Executive Board.
The activities of the constituency are guided by the Nordic-Baltic Monetary and Financial Committee (NBMFC). The Deputy Governor of the Bank of Finland, Marja Nykänen, is a member of the Committee.
In 2018, the Bank of Finland participated in the IMF’s Spring and Annual Meetings, one of the most important fora for discussions on issues of global concern. In the Annual Meetings held in October in Indonesia, Finland played a prominent role as chair of the Boards of Governors of the IMF and the World Bank Group (WBG). An opening address to the Annual Meetings was given by Finland’s Minister of Finance Petteri Orpo. Until July, the tasks relating to Finland’s chairmanship were the responsibility of Governor Erkki Liikanen.
The International Monetary and Financial Committee (IMFC) convened in connection with the Spring and Annual Meetings to discuss the global economic outlook, international financial stability and current economic policy challenges.
Despite strong global economic growth, the discussions were dominated by concerns about increased downward risks and political uncertainty. The IMFC also emphasised the need to strengthen policy buffers and implement measures supporting sustainable and inclusive growth. The international community encouraged the resolving of trade conflicts without recourse to protectionism.
In 2018, the Bank of Finland continued the financial assistance aimed at poor countries by extending, by five years, the deposit of about EUR 7.1 millionSDR 5.8 million (SDR = Special Drawing Rights). in an account administered by the IMF. The interest income on the deposit will be given to the IMF to support the catastrophe trust established in 2015. The trust allows the IMF to swiftly provide debt relief for poor countries hit by catastrophic natural disasters or infectious diseases.
Bank of Finland participates in the work of EU institutions and committees
The Bank of Finland is a member of the European Union’s Economic and Financial Committee (EFC). The EFC has been set up to promote economic policy coordination among EU Member States and participate in the preparatory work for the EU’s Economic and Financial Affairs Council (ECOFIN).
In 2018, the EFC convened ten times in its full composition, i.e. with the national central banks. In its meetings, the EFC discussed, among other things, the condition of the European financial system and themes relating to the deepening of Economic and Monetary Union, such as completing of the Banking Union and the Capital Markets Union.
The EFC also prepared joint policy views for international meetings and discussed topical international issues, such as reforming of the global financial architecture.
The Bank of Finland participated in the work of many EU committees and institutions promoting the stability of the banking and financial system. An important example of these is the European Systemic Risk Board (ESRB). The Governor of the Bank of Finland is a member of the General Board of the ESRB.
Issues discussed by the ESRB in 2018 included the risks to financial stability in the EU, macroprudential policy in the Member States, cybersecurity in the financial system and development of monitoring of the derivatives markets.
In 2018, the Bank of Finland co-organised with the ESRB and RiskLab Finland, for the fourth time, a conference focusing on systemic risk analytics.
Bank for International Settlements promotes central bank cooperation and dialogue
The Governor of the Bank of Finland participates in the regular meetings of the Governors of the member central banks of the Bank for International Settlements (BIS). These meetings discuss developments and current issues relating to the global economy and the financial markets, and matters of interest to central banks.
In 2018, the specific themes of discussion included the financial stability implications of low interest rates, macroprudential tools needed for the housing markets, and artificial intelligence and machine learning in the financial sector.
Governor Erkki Liikanen participated in the annual BIS conference entitled Ten Years After the Great Financial Crisis: What Has Changed? Governor Liikanen chaired the session dealing with changes in the financial system.
Bank of Finland cooperation with other Nordic central banks
The Bank of Finland maintains close contacts with the central banks of the other Nordic countries. Nordic central bank governors convene annually to discuss current central bank issues and other relevant matters.
In 2018, the governors met in Reykjavik, Iceland and discussed monetary policy, central bank regulation, digital central bank money and the completion of the Banking Union.
There were over 50 events organised in 2018 to promote cooperation between Nordic central bank experts. These events covered a wide array of different departmental activities. Together with the other Nordic central banks, the Bank of Finland also organised in 2018 a cybersecurity-themed conference in Helsinki entitled Cyber in Finance.
Training cooperation with the Bank of Russia continues
The Bank of Finland has long been engaged in training cooperation with the Central Bank of the Russian Federation (Bank of Russia). This cooperation has taken the form of, for example, training sessions for Bank of Russia personnel at the Bank of Finland and, in some cases, lectures given by Bank of Finland experts in Russia.
In 2018, the Bank of Finland organised three training sessions with the Bank of Russia; two at the Bank of Finland and one in Russia. The training topics included early warning indicators of financial stability risks, supervision of payment systems and organisation of inspection of IT functions.