A stable and reliable financial system is a prerequisite for price stability and stable economic growth. The financial system is responsible for intermediation of finance to investments in the real economy, and any problems in this financial intermediation are reflected in the access to funding. Financial stability promotes overall stability in society. Banking crises and other serious disruptions affecting the operation of the financial system lead to high costs across the economic sectors. Of key concern is therefore to identify and minimise in advance any risks that may endanger financial stability.
The Bank of Finland is responsible for maintaining confidence in the financial system. When financial instability threatens, the central bank may need to take a more active role in order to maintain the operational ability of the financial system, because, ultimately, the central bank is the safeguard of last resort of the financial system's liquidity situation. This was the case in Finland, for instance, during the banking crisis at the beginning of the 1990s.
In Finland, as in all euro area countries, promotion of financial stability is the central bank’s statutory task. Promotion of stability is also written into the Statute of the ECB and of the ESCB and in the Treatry on the Functioning of the European Union. The Act on the Bank of Finland states that the Bank of Finland shall contribute to maintaining the reliability and efficiency of the payment system and overall financial system and participate in their development.
The Bank of Finland carries out its prudential task in close cooperation with domestic and foreign authorities. The Bank of Finland publishes its official assessment of the stability of financial markets once a year on the Bank of Finland Bulletin website .