Social responsibility
6.2 Bank of Finland's budget and operating expenses
The Bank of Finland aims to be one of the most efficient central banks in the EU. This requires determined economic governance, HR planning and investment assessment. The Bank has focused increased attention on the medium-term planning of investments. Investments are evaluated based on their costs, qualitative benefits and operative risks.
In 2019, the Bank of Finland’s operating expenses totalled EUR 92.0 million (2018: EUR 91.3 million) and total income, EUR 16.8 million. The Bank of Finland also has other income that is not considered in the budget as reductions to the operating expenses and does not show in the table below.
The Bank’s net operating expenses totalled EUR 75.2 million. More detailed information on expenses and the budget can be found in Table 4.
Investment expenditure totalled EUR 9.1 million. In autumn 2019, the Bank’s budgets for the period 2020–2022 were drawn up and, of these, the Board ratified the budget for 2020.
Operating expenses and related objectives are monitored closely in order, among other things, to achieve the Bank's efficiency and sustainability targets. The Board evaluates implementation of the objectives on a quarterly basis.
Pension fund
The pension fund’s operating expenses for 2019 totalled EUR 30.2 million (2018: EUR 29.6 million). Pensions paid constituted the largest cost item, amounting to EUR 28.2 million. Operating income amounted to EUR 13.4 million. The pension fund also received an additional contribution of EUR 10.0 million from the Bank. For a more detailed breakdown, see Table 5.
The pension fund’s operations are presented in its own annual report.
Financial Supervisory Authority
The Board of the Bank of Finland ratifies the budget for the Financial Supervisory Authority (FIN-FSA). The Financial Supervisory Authority’s operating expenses for 2019 totalled EUR 34.8 million (2018: EUR 29.9 million). Total income amounted to EUR 37.1 million, of which supervision and processing fees accounted for EUR 33.3 million, while the Bank of Finland’s contribution to funding was EUR 1.7 million. The surplus for the financial year was EUR 2.3 million. The surplus will be taken into account in the following accounting period, when setting the supervisory and processing fees. Investment expenditure totalled EUR 1.1 million. For a more detailed breakdown, see Table 6.
The Financial Supervisory Authority’s operations are presented in the authority’s own annual report.
| Table 4. | ||
| Bank of Finland | Outturn 2019 EUR m |
Budgeted 2020 EUR m |
| 1. Operating expenses and income | ||
| EXPENSES | ||
| Staff expenses | 32.8 | 34.4 |
| Staff-related expenses | 2.8 | 3.5 |
| Other expenses | 27.3 | 30.5 |
| Banking service expenses | 6.6 | 7.4 |
| Depreciation | 8.3 | 7.7 |
| Total | 77.8 | 83.5 |
| Banknote acquisition costs | 5.7 | 6.8 |
| Pension fund contribution | 8.5 | 8.3 |
| Total operating expenses | 92.0 | 98.6 |
| INCOME | ||
| Banking service income | 2.5 | 2.5 |
| Real estate | 7.8 | 6.1 |
| Other income | 0.7 | 0.1 |
| Services to FIN-FSA | 5.8 | 6.5 |
| Total income | 16.8 | 15.2 |
| Net | 75.2 | 83.4 |
| 2. Investment | ||
| Real estate investment | 5.2 | 5.1 |
| Head office premises | 1.3 | 1.4 |
| Vantaa premises | 3.9 | 3.6 |
| Other premises | 0.0 | |
| IT-equipment and software | 3.0 | 5.1 |
| Cash handling machines | 0.0 | 0.0 |
| Security equipment | 0.8 | 1.2 |
| Other | 0.0 | 0.1 |
| Total investment | 9.1 | 11.5 |
| Due to rounding, the totals do not necessarily tally. | ||
| Table 5. | ||
| Pension fund | Outturn 2019 EUR m |
Budgeted 2020 EUR m |
| 1. Operating expenses and income | ||
| EXPENSES | ||
| Staff expenses | 0.0 | 0.1 |
| Expenses for pension fund activities | 0.5 | 0.6 |
| Pension fund real estate expenses | 0.5 | 0.5 |
| Depreciation | 0.9 | 0.9 |
| Pensions paid | 28.2 | 28.2 |
| Total expenses | 30.2 | 30.3 |
| INCOME | ||
| Employment pension contributions | 11.7 | 12.6 |
| Internal rents | 1.7 | 1.7 |
| Pension fund contribution | 10.0 | 10.0 |
| Total income | 23.4 | 24.3 |
| Net | 6.8 | 6.1 |
| Due to rounding, the totals do not necessarily tally. | ||
| Table 6. | ||
| Financial Supervisory Authority | Outturn 2019 EUR m |
Budgeted 2020 EUR m |
| 1. Operating expenses and income | ||
| EXPENSES | ||
| Staff expenses | 21.1 | 22.4 |
| Staff-related expenses | 1.2 | 1.5 |
| Other expenses | 4.2 | 5.9 |
| Depreciation | 0.9 | 1.2 |
| Services from the Bank of Finland | 5.8 | 6.5 |
| Pension fund contribution | 1.5 | 1.7 |
| Total operating expenses | 34.8 | 39.2 |
| FUNDING OF OPERATIONS | ||
| Supervision fees | 31.5 | 33.6 |
| Processing fees | 1.8 | 1.6 |
| Bank of Finland contribution to funding | 1.7 | 2.0 |
| Surplus/deficit transferred from previous year | 2.1 | 2.0 |
| Total income | 37.1 | 39.2 |
| Surplus transferred to next year | 2.3 | |
| Due to rounding, the totals do not necessarily tally. | ||