Annual Report of Operations 2025
Financial stability 2025
The Bank of Finland is tasked with strengthening the resilience of the Finnish financial system. It seeks to identify risks and vulnerabilities that threaten financial stability and to mitigate them. In 2025, the Bank of Finland further developed its compilation of statistics together with the European Central Bank (ECB). In addition, the Bank of Finland improved the usability of its statistics. This strengthened the underlying data for the Bank’s statistics on funds and agriculture, among other things, and for managing the financial risks of climate change.
- Financial stability risks in the form of, for example, international power politics and the beleaguered housing market, played an increasingly large role in 2025. The Bank of Finland responded to the challenges by further developing macroprudential policy and by providing recommendations on risk management.
- The Bank of Finland took an active role in European initiatives on macroprudential policy and banking regulation, assessed the resilience of the financial system, and proposed ways to strengthen financial stability, for example by keeping the regulations on mortgage lending tight.
- The Bank of Finland developed new technological solutions, including a cloud-based analytics platform and also an open data service for improved monitoring of financial stability and for expanding the financing of environmentally friendly investments.
International power politics and the sluggish housing market continued to be a financial stability concern in 2025
In May 2025, the Bank of Finland published its extensive annual financial stability assessment of the Finnish financial system’s stability and outlook, along with proposals for measures to strengthen financial stability.
According to the assessment, the biggest risk to financial stability in the short term is international power politics. In the medium term, the biggest risk is a prolonged downturn in the housing and real estate markets, and in the long term, the erosion of the international rules-based system (Table 6).
| Summary of the assessment of Finland’s financial stability | ||
|---|---|---|
| Short-term risks | Medium-term risks | Long-term risks |
| Operating environment risks for the financial system | ||
| Aggressive global power politics would add to the risk of liquidity crises and operational disruptions in the financial markets. | A weakening of the economy would prolong the downturn in the real estate market and impair the debt-servicing capacity of households, businesses and investors. | Erosion of the international rules-based system would pose a serious threat to financial stability, especially if the common aim of mitigating risks through sufficient regulation is undermined. |
Geopolitical turbulence had only a minor impact on Finland’s financial stability in 2025
The aggressive foreign and trade policies of the superpowers witnessed in 2025 can be a threat to financial stability, for example by slowing foreign trade and economic growth, shaking the international financial markets and eroding the investor confidence placed in peripheral countries like Finland, or by exacerbating the hybrid threats against Finland.
Finland’s geographical location and the hybrid interference targeting Finland could even weaken investors’ confidence in the country as an investment location and hinder access to finance from the international financial markets for the Finnish Government and for Finnish banks and companies.
An analysis by Bank of Finland experts shows that following the start of Russia’s war in Ukraine in February 2022, there was a temporary increase in Finland’s country risk, calculated on the basis of the risk premia on Finnish government bonds. Since then, however, the country risk has been low, and for example the damage to pipelines and cables in Finnish territorial waters has not had a material impact on the size of the country risk (Chart 13).
In 2025, the Bank of Finland chaired a working group of the European Systemic Risk Board (ESRB). The working group produced a report indicating that the international economic and financial system is highly interconnected with the United States not only via trade but also through finance, investment and the financial system infrastructure. A weakening of the US economy or erosion of the international role of the US dollar could therefore increase risks to the stability of the international financial system (article in Finnish).
Since 2023, the Bank of Finland has also co-chaired, with the European Central Bank (ECB), the ESRB’s Analysis Working Group (ATC), and has been a member of the Macroprudential Analysis Working Group of the European System of Central Banks (ESCB).
Finland’s housing market did not yet return to strong growth
The Bank of Finland, in its publications, regularly analyses the financial stability risks related to the housing and real estate investment markets, because the materialisation of such risks could, in the worst case, trigger and deepen banking and financial crises.
The rapid rise in interest rates in 2023 hit the Finnish housing market and the economy exceptionally hard. The recovery in housing prices and residential construction has been slow. This continued in 2025, despite the significant increase in sales of existing dwellings (Chart 14).
According to the Bank of Finland’s financial stability assessment, a slower-than-forecast recovery in the economy and the labour market could strain the debt-servicing capacity of mortgage borrowers and hit particularly the real estate and construction sectors and open-end real estate funds.
In 2025, many of the open-end real estate funds still had to restrict redemptions of fund units due to liquidity problems.
Bank of Finland assessed financial stability risks arising from climate change and AI
The Bank of Finland also analyses global agents of change that are new or expanding and whose impact on economies and financial systems is likely to strengthen over time.
Regarding climate change, the Bank of Finland’s analysis work included an examination of how governments could most effectively boost investment in low-emission technologies (article in Finnish).
In 2025, the Bank of Finland, together with its partners, organised two international seminars on the utilisation of artificial intelligence (AI). The first of these, held in June, discussed AI and systemic risk analytics, and the second, in November, discussed the impacts of AI on the economy, financial sector and financial supervision.
The Bank of Finland took part in a fast-paced innovation and software development event titled Junction Hackathon, which was organised in Helsinki in November 2025. The Bank, together with the FIN-FSA, prepared a task for the participants, in which they had to identify, with the help of AI, overlaps and contradictions in financial regulation.
In February 2025, the Bank of Finland conducted a survey on the prospects, benefits and risks of quantum technology in the financial sector. Respondents considered that the greatest potential of quantum computing lies in improving risk management and information security and developing investment activities.
Finnish financial system’s resilience remained strong in 2025
The resilience of the Finnish financial system remained strong in 2025. Both banks and their customers were well prepared to cope with sudden turns in the economy.
The Bank of Finland participated actively in macroprudential policy preparation and supported the FIN-FSA Board’s decisions on the deployment of macroprudential tools.
Bank of Finland assessed the financial system’s resilience and proposed ways to strengthen financial stability
Assessments by the Bank of Finland and other financial stability authorities in 2025 show that Finnish banks and their main customer groups, such as households, businesses and real estate investors, are in general well equipped to withstand shocks to the economy and the financial system, including those of even greater severity.
In 2025, the Bank of Finland issued proposals for strengthening financial stability. In its financial stability assessment, the Bank of Finland stated that Finnish authorities and the financial sector should strengthen financial stability further
1) by preparing for political, economic and financial threats that are increasingly difficult to predict;
2) by ensuring that regulations on bank capital and on mortgages and housing company loans are kept sufficiently tight and by allowing for a more flexible use of macroprudential tools;
3) by supporting European measures for the simplification and harmonisation of financial regulation and for improving the allocation of finance to European companies (Table 7).
| Policy recommendations for strengthening financial stability | ||
|---|---|---|
| The financial sector and the authorities must continue to prepare for operational disruptions and financial crises | The resilience of financial market participants must be maintained through macroprudential policy | The EU must harmonise and diversify Europe’s financial system |
| The financial sector and the authorities must be prepared to deal with complex economic, financial stability and security threats that are difficult to predict. | Banks need sufficient capital buffers as a counterbalance to their structural vulnerabilities. The requirements on mortgages and housing company loans must not be diluted. | Finland must actively advance the Savings and Investment Union to speed up competitiveness, investment and growth and to increase harmonisation within Europe’s financial system. |
| Finland’s public finances must be consolidated and financial stability consequently secured. | The responsiveness of macroprudential policy should be improved by allowing for more flexible use of countercyclical capital buffers. | International and domestic financial regulation should be reassessed and simplified, but deregulation should be approached with caution. |
Bank of Finland participated in preparation of macroprudential policy
Macroprudential policy refers to measures for preventing financial crises and strengthening the resilience of, for example, banks and the housing market. In Finland, decisions on macroprudential policy measures are taken by the FIN-FSA Board, which in 2025 was chaired by Marja Nykänen, Deputy Governor of the Bank of Finland.
Experts from the Bank of Finland and the FIN-FSA prepare analysis reports to support the macroprudential decisions, and some of these analysis reports are published. In addition, the Bank of Finland issues, on a quarterly basis, an official opinion on the FIN-FSA Director General’s proposals for FIN-FSA Board decisions.
The FIN-FSA Board decided in 2025 to keep largely unchanged the macroprudential requirements it had set earlier. In its opinions, the Bank of Finland supported the FIN-FSA Director General’s proposals for FIN-FSA Board decisions.
Simplification of banking regulation and bottlenecks in financing were assessed by the Bank of Finland in 2025
Governor of the Bank of Finland Olli Rehn was a member of the High-Level Task Force on Simplification created by the ECB’s Governing Council for the purpose of preparing proposals for the European Commission concerning the simplification of banking regulation.
The aims of this include providing greater clarity on banks’ capital requirements, decreasing the differences between countries in the regulation and supervision of banks, reducing overlaps in the reporting requirements for banks, and streamlining the regulatory framework for small banks.
Negative view expressed by the Bank of Finland on the Government’s intentions to ease legal requirements regarding residential mortgage lending
The Bank of Finland participates in the preparation of domestic financial legislation via its membership of working groups and by issuing opinions. The Bank of Finland issued an opinion in which it took a critical view of the Government’s intentions to ease certain requirements concerning the maximum length and size of housing loans and housing corporation loans.
Bank of Finland examined bottlenecks in the provision of financing for businesses
The Bank of Finland was a member of a working group focusing on a growth strategy for the financial sector, set up by the Ministry of Finance. The working group assessed the bottlenecks in Finnish companies’ access to finance and ways to mitigate these.
The working group concluded, among other things, that in Finland companies do not have sufficient access to equity financing when they are at the stage of rapid growth and seeking to internationalise their operations. The Government, in its medium-term policy review in spring 2025, decided to implement several of the recommendations issued by the working group.
In addition, in summer 2025, the Bank of Finland played an active part in the public debate on the sufficiency of bank lending to businesses.
Bank of Finland data and technology project received recognition in 2025 as a significant financial stability initiative
The Bank of Finland took a significant step forward in the utilisation of data and technology for monitoring and supervising financial stability. In 2024–2025, the Bank, in cooperation with the FIN-FSA, developed an innovative cloud-based analytics platform for processing real-time information from the Positive Credit Register.
In March 2025, the platform received an award from Central Banking, the information resource for central banks, for being a significant financial stability initiative. Central Banking praised the project’s bold vision and advanced technological approach.
The Positive Credit Register contains real-time information on the credit and guarantees of private individuals. In addition to credit information, the Register contains data on the wages, pensions and benefits of borrowers as well as income data ascertained for the purposes of the credit decision. The data is transferred to the Bank of Finland in a form where credit and borrower-specific information cannot be linked to particular individuals.
The analytics platform facilitates the analysis of information from the Positive Credit Register and thus the understanding of risks related to household indebtedness. This helps in the preparation of measures for safeguarding stability. In addition, the information produced by the analytics platform is part of the drive to make statistics available for public use.
The uses and potential of the data are described in more detail in the Parliamentary Supervisory Council’s Annual Report 2024 (in Finnish). The Positive Credit Register’s dataset was utilised at the Bank of Finland for the first time in a spring 2025 Bank of Finland Bulletin article by Johanna Honkanen and Hanna Putkuri entitled ‘Mortgage borrowers have proved resilient against the interest rate risk of their loans’, in which information in the Register was used to assess the ability of households to cope with the increase in interest payments.
Bank of Finland participated actively in reform of the reporting framework for euro area banks in 2025
The Bank of Finland took an active role in 2025 in the Integrated Reporting Framework (IReF) launched by the ECB’s Governing Council in December 2021.
The purpose of the project is to harmonise the collection of statistical data by banks in the euro area, thus reducing the statistical reporting costs particularly for banks operating in more than one country. The project will also involve the harmonisation of statistical and prudential reporting.
The IReF regulation will replace various current ECB statistical regulations, and after the parallel reporting phase, the Bank of Finland’s RATI, Luoti and TIHA data collections will be discontinued.
Due to the changes in the geopolitical environment, the ECB’s Governing Council in 2025 had to reassess the selection of an implementation platform for the IReF and seek a European alternative. This has delayed the progress of the project. The reassessment has not yet been completed and it remains to be seen when the project can be launched.
The first phase of the IReF is planned to start in December 2029 and will primarily include implementation of features replacing the current BSI MIR and AnaCredit statistical regulations, as well as the provisions of the SHS regulation on the sectoral reporting of data by banks.
Bank of Finland revised its compilation of investment fund statistics in 2025 in line with the ECB Regulation on these statistics
In 2025, the Bank of Finland launched a project for modifying its statistics and data collection systems in line with the recast ECB Regulation concerning statistics on investment funds (ECB/2024/17). As a result of the modifications, the Bank of Finland is ready to receive data from investment funds that conforms with the ECB Regulation, and the reporting of this data started in January 2026.
The key change introduced by the Regulation is that statistics which were previously kept mainly on a quarterly basis will now be compiled on a monthly basis, which requires significant changes in most Member States. In Finland, monthly data has already been collected since 2008.
At the same time, the Regulation nevertheless allows quarterly data collection and a longer reporting schedule for some alternative investment funds (AIFs), and the Bank of Finland introduced these at the start of 2026.
The AIFs have welcomed the changes in reporting. The new reporting requirements concerning the content of data will make the data more granular and improve the possibilities for analysing the datasets on funds. More granular data also facilitates the comparison and combination of various statistical data.
As a result of these changes, the Bank of Finland will also submit fund-specific data for internal use by the European System of Central Banks (ESCB). New data will be reported on the geographical allocation of fund investments and on environmental, social and governance (ESG) compliance, among other things.
The classification of the type of fund will also be more detailed, which will enhance the usability of information. In addition, the new reporting requirements regarding income received, dividends paid and fees paid will enhance the quality of the balance of payments statistics once the data content of the ESCB’s Centralised Securities Database (CSDB) is extended to include the reported data.
Functionality and accessibility of open interfaces improved at the Bank of Finland in 2025
The open data service is the Bank of Finland and FIN-FSA’s joint collection of open application programming interfaces (APIs). One of the interfaces provided is a time series API containing the time series used in the Bank of Finland’s statistical releases.
In 2025, the Bank of Finland produced on its website an open data service page that contains an interactive report giving an overview of the time series API. The overview introduces the datasets that can be obtained via the API, including details of their composition and content.
The report utilises the interface, and its data content always corresponds to the interface content. The interactivity makes it easy for users to acquire only the content that they need. With the aid of examples, the report helps users query datasets in the interface and thus makes it easier to use the Bank of Finland’s time series data.
Bank of Finland started to publish more granular data on agricultural loans in 2025
Changes in the operating environment affecting farms prompted the Bank of Finland to develop enhanced analysis tools and to publish more extensive data on agricultural loans.
Closer monitoring of agricultural loans granted by banks operating in Finland is now possible via the Agricultural loans dashboard published on the Bank of Finland website in 2025.
The number of farms has long been declining, but at the same time an increasing number have been converted into limited liability companies. This is also reflected in the banking statistics: the stock of loans to sole proprietors has decreased while loans to agricultural undertakings in the form of non-financial corporations have increased. However, the annual change in the stock of loans to non-financial corporations also turned negative in 2025, after a long period of continuous growth.
The agriculture sector has in recent years been under strain from the COVID-19 pandemic and the rapid rise in interest rates and other costs.
The amount of non-performing loans in the agriculture sector is large. A particularly high increase in such loans occurred in 2020. A loan is non-performing when payment is more than 90 days past-due or there is reason to assume the borrower is unlikely to pay. In 2025, the amount of non-performing agricultural loans decreased but was still large as a share of the loan stock.
Bank of Finland participated in the development of financial sector climate statistics in 2025
The ESCB expert working group continued its work in 2025 on the development of indicators concerning the physical and transition risks of climate change to the financial sector. In November, the ECB published a press release on the matter, Climate Change Indicators: November 2025.
The Bank of Finland participated in an ECB workshop on biodiversity loss and its impacts on price stability. Finnish banks are better prepared than the other euro area banks for policy measures aimed at steering markets towards carbon neutrality.
The Bank of Finland also participated in the network of experts on climate funding, which was chaired by the Ministry of the Environment. The network is preparing a climate funding strategy and will develop specific tools for the assessment of the climate impacts of funded projects.
In 2025, the Bank of Finland continued to co-chair, together with the central bank of Spain, the Committee on Monetary, Financial and Balance of Payments Statistics’ task force on sustainability reporting.
Corporate sustainability reporting requirements became applicable in 2024. Based on these requirements, the working group determined the key indicators and made preparations for collecting this data. In February 2025 the situation changed as the European Commission issued an Omnibus I proposal, the objective of which is to simplify sustainability rules and thus to reduce the administrative burden of companies.
Following the Omnibus 1 proposal, the working group focused on preparing impact assessments on the proposed changes in reporting requirements and on monitoring progress.
The Bank of Finland’s Statistics Unit analysed the pricing of climate change transition risks in corporate bank loans on the basis of the carbon dioxide emissions of borrowers. The Bank of Finland published an analysis article by Ville Tolkki on this subject, entitled ‘Banks are pricing climate change transition risks in their corporate loans’ (in Finnish).
Bank of Finland’s Household Wealth Survey 2023 completed in 2025
The Bank of Finland’s Household Wealth Survey for 2023 was completed in March 2025. In early 2024, the Bank of Finland, together with Statistics Finland, collected Finnish household assets data as part of the fifth wave of the ECB’s Household Finance and Consumption Survey (HFCS).
Statistics Finland collected data in the first months of 2024 from nearly 9,000 households. The Bank of Finland added a new data item to the data collection: data on households’ crypto-assets.
The survey will provide important information on the wealth, debts and consumption of households and the distribution of these among households. Analysis of household indebtedness is important as the debt-servicing problems of highly indebted households can have detrimental second-round effects on the economy and financial system.
It is important that central banks are able to use the data collected via the HFCS to monitor the transmission of monetary policy measures to household finances and wealth.
