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Bank of Finland
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Calendar of the Governor Erkki Liikanen
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The Bank of Finland is the world's fourth oldest national central bank. With Finland's transfer from Swedish rule to coming under Russian rule, in 1809, a decision was made to renew Finland's monetary environment. In 1811, Tsar Alexander I issued a decree announcing the establishment of Waihetus- Laina- ja Depositioni-Contorin a savings and loan company based in Turku - the then-capital of Finland. This pioneering bank later became the Bank of Finland, which moved, with the relocation of the capital city, to Helsinki in 1819.
The Bank only began to undertake more conventional central banking functions at the end of the 1800s once Finland got its own currency and commercial banks were established. In 1875, the Bank of Finland's regulations stated that a central bank's function was "keeping financial institutes stable and on an even keel as well as promoting and easing the flow of cash."
Independence for Finland reinforced the Bank of Finland's position as the country's central bank. For a couple of decades following World War II, the Bank had extensive regulatory powers regarding the country's currency and capital movements. By the end of the 1950s the regulations began to be removed and by the 1990s they had been abandoned altogether.
The Bank of Finland's main objective had been defined as the maintenance of the markka's exchange rate stability. Achievement of this objective had been through regulation of the amount of currency in circulation and the setting of interest rates as well as the rate of exchange of the markka in relation to other currencies. The Bank was also responsible for financial system stability and the promotion of the safety and efficiency of the distribution of currency. The Bank of Finland had sole right to issue currency.
In 1995, following a referendum, Finland became a member of the European Union. One of the reasons behind the country's initiative to join the EU was the drive to influence the economic conditions affecting the country. Sustaining stable monetary conditions for a small nation such as Finland is clearly enhanced when looked at from the perspective of membership within a Europe-wide economic area rather than standing on the outside looking in.
Finland's adoption of the euro in 1999 did not alter the scope of tasks that traditional belonged to the Bank of Finland. The biggest difference is that the Bank of Finland's operating base is no longer purely national in nature; rather it has spread beyond the traditional borders with membership of the European System of Central Banks.
Bank of Finland 200 years history book
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