The Bank of Finland safeguards financial stability. It assesses risks to the financial system, participates in macroprudential policy and compiles financial statistics.
The Bank of Finland assesses threats to financial stability
The Bank of Finland participates in maintaining the reliability and efficiency of the Finnish financial system. It identifies and assesses risks that, if materialised, could endanger the stability of the financial system as a whole. The objective is to maintain efficiency in financial intermediation and thereby support sustainable growth, employment and well-being over the long term.
Identified sources of potential risk to the Finnish financial system are high household indebtedness and structural vulnerabilities in the banking sector. The Finnish banking sector is large and concentrated; individual credit institutions are therefore systemically important for the financial system and the economy as a whole. Its banks are also vulnerable to similar kinds of risks related to lending, investment and funding.
Risks are mitigated by macroprudential policy measures
Financial stability risks can be mitigated by using macroprudential policy measures to address potential issues in good time. In Finland, decisions on macroprudential measures are taken by the Finnish Financial Supervisory Authority (FIN-FSA) Board. The purpose is to strengthen credit institutions’ and households’ financial buffers against risks. The Bank of Finland takes an active role in macroprudential policy preparation, impact assessments and the development of macroprudential tools.
The Bank of Finland works in close collaboration with other financial stability authorities and institutions, both domestically and internationally. This cooperation supports the development of financial system regulation, supervision and crisis management. In Europe, key initiatives in this area include the development of the Banking Union and the Capital Markets Union.
The Bank of Finland produces and develops statistics
The Bank of Finland is responsible for key financial market statistics. Reliable statistics afford a detailed and up-to-date overview of the operation of the financial system. The Bank of Finland services its own information needs and others’ by actively developing the collection and compilation of statistics.
Key areas of development in Finland include the compilation of statistics on entities that provide consumer credit, as well as on certain other financial intermediaries, and the deployment of new distribution channels for statistics, as part of the open data services provided by the Bank of Finland and the FIN-FSA. The common analytical credit database (AnaCredit) is a major European development project.