6.4 The Bank of Finland and international cooperation in 2020

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.

The Bank of Finland is represented in a number of ECB bodies and other international fora. All representatives are listed on the Bank of Finland website.

The Bank of Finland is responsible for Finland’s relations with the International Monetary Fund

The International Monetary Fund (IMF) is an organisation of 190 member countries, working to foster international cooperation, open and rules-based foreign trade, sustainable economic growth and financial stability.

The Governor of the Bank of Finland, Olli Rehn, is Finland’s representative on the highest governing body of the IMF, the Board of Governors.

The Bank of Finland also influences the activities of the IMF via the Nordic-Baltic constituency, which has a joint representative on the Executive Board of the IMF. In 2020, this post was taken up by Mika Pösö for a three-year term ending in 2022.

Policy positions on topics discussed by the IMF Executive Board are agreed between the countries of the constituency.

In 2020–2022, the lead role in preparing the policy positions is taken by Finland. This preparatory work is carried out in collaboration between the Bank of Finland and the Finnish Ministry of Finance.

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.

IMF meetings were held virtually in 2020

Due to the COVID-19 pandemic, the meetings of the International Monetary and Financial Committee (IMFC), organised in connection with the IMF Spring and Annual Meetings, were held virtually.

In the spring, the Nordic and Baltic countries were represented on the IMFC by Finland’s Minister of Finance Katri Kulmuni, in the autumn by Norway’s Minister of Finance Jan Tore Sanner.

The discussions at the IMF Spring and Annual Meetings focused on the global economic crisis caused by the pandemic and on the international community’s measures to mitigate the impacts of the crisis.

In her contributions, Kristalina Georgieva, Managing Director of the IMF, stressed the role of swift and supportive policy action in restoring confidence, called for support for the poorest countries and stressed the risks associated with deepening sovereign debt problems.

Bank of Finland participation in the work of EU institutions and committees

The Bank of Finland is a member of the EU’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, commonly known as the Ecofin Council.

In 2020, the EFC convened 16 times in its full composition, i.e. with the national central banks.

At its meetings, the EFC discussed, among other things, the impacts of the COVID-19 pandemic on the economy and the financial markets, the condition of the European financial system, development of the Banking and Capital Markets Union, prevention of money laundering, financial market innovations and the modernisation of the global financial architecture. The EFC also prepared joint policy views for international meetings.

In 2020, the Bank of Finland also 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.

In 2020, the ESRB discussed the increased risks and vulnerabilities to financial stability in the EU stemming from the COVID-19 crisis and urgent macroprudential measures in the exceptional circumstances of the crisis.

Due to the pandemic, the Conference on Systemic Risk Analytics, which was to be co-organised by the Bank of Finland, the ESRB and the RiskLab Finland research group at Arcada and Hanken School of Economics, had to be rescheduled for 2021.

The 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 2020, the meetings were held in virtual format. While the topics largely focused on the economic consequences of the COVID-19 crisis, the Governors also discussed the use of big data in forecasting and cyber security risks on the financial markets.

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 issues.

Instead of traditional face-to-face meetings, the governors and deputy governors convened virtually in 2020. The topics of the meetings included payment systems and money laundering, digital central bank money, the ECB’s strategy review, responsible investment and the impact of low interest rates.

Cooperation between Nordic central bank experts was furthered in 2020 in virtual meetings covering a wide array of different departmental activities.

Training cooperation with the Bank of Russia

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 2020, there were no such events on account of the COVID-19 pandemic.