Memoranda of Understanding

One of the Bank of Finland’s tasks is to contribute to maintaining the reliability and efficiency of the payment system and the overall financial system in Finland. In carrying out this task, the Bank of Finland works closely together with EU central banks and other authorities. The principles of cooperation are laid down, for example, in the following Memoranda of Understanding (MoU), in the issuance of which the Bank of Finland has been one of the contributors.

 

 

The MoU and the resultant supervisory/oversight cooperation focus on central counterparty services provided by the Dutch European Multilateral Clearing Facility N.V. to the Helsinki Stock Exchange. The document outlines the principles for cooperation and information exchange between the authorities.

 

 

The MoU is an agreement on specific arrangements for cooperation and information sharing between EU central banks and banking supervisors in Stage Three of Economic and Monetary Union in relation to large-value payment systems. The MoU replaces previous cooperation arrangements made in 1994.

 

 

Ongoing financial integration increases the likelihood of systemic disturbances affecting more than one Member State at the same time. The MoU includes a set of principles and procedures for information sharing to enhance cooperation between EU banking supervisors and central banks in handling cross-border crises.

 

 

The aim of the MoU is to enhance the cooperative capabilities of the Nordic central banks for undertaking joint analysis of a crisis situation, making the relevant decisions and taking the appropriate action if a financial crisis were to threaten a bank domiciled in a Nordic country and having cross-border establishments in two or more Nordic countries. In the MoU the central banks also agree on the establishment of a joint crisis management group and the organisation of information management in a crisis situation.

 

 

The MoU between the Bank of Finland and Riksbanken is a statement of principles for the exercise of oversight over the Swedish central securities depository (VPC AB) and its subsidiary, the Finnish central securities depository (APK OY).

 

 

The objective of the MoU between the Bank of Finland and the Financial Supervision Authority is to improve the parties’ crisis management capabilities by enhancing cooperation and ensuring an appropriate exchange of information between the parties as necessary for handling potential crisis situations. The MoU deals with cooperation when preparing for crisis management situations, information exchange in connection with the emergence of a crisis or other disturbance, the tasks of the Financial Supervision Authority and the Bank of Finland in crisis management and the forms of cooperation in crisis situations.

 

 

The MoU is designed to enhance the parties’ crisis preparedness by ensuring an appropriate exchange of information in crisis situations and by strengthening cooperation in the management and resolution of financial crises.

 

 

The MoU is aimed at fostering the stability of the financial systems in the EU and its member states by enhancing cooperation in financial crises and in crisis preparation between EU financial supervisory authorities, central banks and finance ministries. The cooperation includes the exchange of information and situational assessments relevant for crisis management, the coordination of public communication and the organisation of crisis management exercises. This MoU replaces the Memorandum of Understanding on Cooperation between the Banking Supervisors, Central Banks and Finance Ministries of the European Union, issued in 2005.

 

Cooperation agreement on cross-border financial stability, crisis management and resolution between the Nordic and Baltic ministries of finance, central banks and financial supervisory authorities (entered into force 17 August 2010)

The cooperation agreement is designed to enhance cooperation between the Nordic and Baltic countries in financial crisis prevention, management and resolution. By signing the agreement, the public authorities in the Nordic and Baltic countries increase their preparedness to take action in situations where a troubled bank conducts business in several countries. By signing the agreement, the Nordic and Baltic authorities are also the first to implement the Memorandum of Understanding on cooperation on cross-border financial stability, which was signed by all EU countries in June 2008, and which requires conclusion of local or institution-specific agreements to complement the EU-level agreement.

 

This legally non-binding agreement, based on voluntary cooperation, enhances cooperation by establishing common procedures for information sharing and coordination. The aim is to reduce the risk of cross-border propagation of financial crises and to improve the efficiency of crisis management measures. The agreement lays down the mechanisms and conditions for joint action in addressing crisis situations. However, it does not affect the responsibilities in actual crisis resolution, which continue to remain within the sphere of national decision-making, as before. The agreement does not cover purely national financial market problems.