Bank of Finland articles on the economy
Bank of Finland Bulletin 3/2020 - Economic forecast for the Finnish economy
Published 9 Jun 2020
pdf, 654 kB
Bank of Finland Bulletin 2/2020 - Financial stability
Published 20 May 2020
pdf, 1.70 MB
The worst-case scenario in the corona spring did not materialise, but we will still need stamina for the long haul9 June 2020, Bank of Finland Bulletin 3/2020
Healthy public finances provide an irreplaceable shield when we hit hard times. It is important to focus the fiscal policy stimulus effectively and take forward structural reforms. Finland’s labour market, too, has a vital role to play as the economy enters the recovery phase.
Regulation has strengthened the financial system’s resilience5 May 2020, Bank of Finland Bulletin 2/2020
Financial institutions' solvency and liquidity positions have been strengthened since the global financial crisis. A well-functioning banking sector together with government relief measures will bolster the economy's outset for growth once the crisis subsides.
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The current loan-to-value cap on housing loans urgently needs to be accompanied by a new, more comprehensive cap on debt. This would take into account all a loan applicant’s debt relative to their income.
The more debt households take on during an economic upswing, the more likely they are to cut consumption when the economy begins to run out of steam.
The indebtedness of Finnish households relative to income has grown considerably since the turn of the millennium. A proportion of new residential mortgage holders have a heavy debt burden relative to their income.
Consumer credit can drive households into financial difficulties. New measures are needed to prevent increasing debt problems.
Finnish banks have granted relatively little credit to those industries most vulnerable to bankruptcies. This has helped minimise banks’ corporate credit risks.
Foreign investment in the Finnish and other Nordic property markets has increased. As a consequence the Finnish market is more vulnerable to external risks.
Investment in IT will improve banks’ long-term profitability, while weakening short-term profitability.
The accessible summary sums up the solutions presented in the Bank of Finland’s stability assessment that can get a grip on households’ excessive debt levels.
Finnish households have a worrying level of debt. Advance measures should be taken to prevent the accumulation of excessive debt.
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