Member of the Board Sinikka Salo's Farewell speech at the ECB choir's concert at the House of Nobility in Helsinki
Speeches and interviews
Speech
Friday 1 October 2010, 12:00 AM
Looking back at my 41-plus years of professional life, my uppermost thought is that I would count myself fortunate in many ways. I have truly enjoyed going to work every morning.
I am fortunate to have found an interesting profession – to have become an economist. Economics provides the appropriate tools for those of us who would analyse society and the exercise of power, and also for those who wish to influence them. My choice of pro-fession was never obvious or easy, nor was it even conscious – quite the contrary. When I came to Helsinki at the age of 17 to begin my studies, I really did not know what to stu-dy. I ended up studying mathematics, chemistry and physics. You see, admittance to the-se subjects did not require an entrance test. That was my criterion. But I didn't want to be a teacher, which is where the pursuit of mathematics would eventually have taken me. So I started to look for something else. Statistics – though mathematics, too – offered me a different set of prospects. I switched to statistics as my major and so had to change faculties. Once in the faculty of political science, I didn't feel comfortable graduating from the faculty without having studied any of its 'real' subjects. I came to choose economics, which was an easy option considering my background in mathematics. But it so happened that I became intensely interested in it, so much so that I continued to do post-graduate studies while already working and eventually completed my doctorate in economics. There has been much talk about the importance of graduating sooner – and with good cause.
But with this story, I would also express my sympathies for those young students who have no clue what to study and 'wonder about' in the university – I used to be one of them.
So you see, starting with the choice of profession, my working career has been marked by coincidence – and mostly good fortune. My long and winding road to becoming an economist first took me to the Research Institute of the Finnish Economy, where I wor-ked as a researcher, and then to the Bank of Finland. Coincidence also played a part when I took up, for a while, the position of assistant professor at the university. However, the job in Frankfurt – at the European Monetary Institute, EMI, and its successor the European Central Bank – was a result of a more conscious pursuit. With the children all grown, I decided I would try to make a dream come true – that of an international career. Here again I was helped by my good fortune: I was privileged to join a central European project and discovered my own mission, Europe and the euro.
The rest is history: in autumn 2000, when the position of board member at the Bank of Finland opened up, I happened to be the right person in the right place, and on 15 Octo-ber, I will have completed two terms – 10 years – of service on the Bank's board.
When appointed to the board of the Bank of Finland – from outside the traditional circles – I was excited about this great opportunity. And rightly so: this post has broadened my thinking in a number of ways. I have had the privilege of participating in the project of the century: European integration and establishment of the single currency in Europe. I have taken advantage of every opportunity that has come with the position of board member to further the objectives of the Bank of Finland and pursue my mission, through work and stamina – Labore et Constantia.
It has been a source of great pleasure to see the Bank of Finland gain an established posi-tion in Finnish society after the introduction of the euro. Condescending remarks are no longer being made, and there is a broad appreciation for the Bank of Finland as a reliable and independent expert organisation in the new context: the monetary authority of Fin-land and an active and constructive member of the Eurosystem – as spelt out in our stra-tegy. Obviously, the Bank of Finland no longer has the same influence and power that it had in the post-war years of regulation and control. But who would even yearn for such power!
The Bank of Finland is a modern and important European actor, with a responsibility to promote the common monetary policy and provide suitable conditions for EMU in Fin-land. The Bank of Finland issues warnings of inflation risks. It is an independent expert that analyses the measures required in economic policy and the various sectors of the Finnish economy, such as labour market policy and corporate pricing behaviour, in order to maintain price stability and price competitiveness.
A key element of the mandate of the euro area central banks is to point out the necessity of adherence to the stability and growth pact, which is a vital part of economic and mo-netary union. Since the recent crises, general government fiscal positions have deteriora-ted dramatically all over Europe. It is important to return to a sustainable path and to quickly regain control of indebtedness. Under these circumstances, the critical role of the Bank of Finland in evaluating budget sustainability is further highlighted.
European integration of financial markets is another key dimension of the Bank of Fin-land's activities. This remains on the agenda of the national central banks, despite some setback due to the recent crisis. The integration of financial markets – including common Europe-wide payment and settlement systems and EU-level supervision of cross-border credit institutions – is crucial for promoting the smooth functioning of the internal market and, therewith, economic growth and wellbeing in Europe. This also promotes Finnish interests. Also here the Bank of Finland must emphasise the importance of persistent ef-fort and seeking after longer-term benefits.
Overall, I see the Bank of Finland as an important centre of expertise for monetary policy and financial markets in Finland. This expertise is especially highlighted against the background that the Finnish banking sector is largely in the hands of foreign banking groups, which means that there is a danger of a narrowing of financial market expertise in Finland. This would clearly diminish the possibilities for Finns to move into expert and official positions in EU bodies which increasingly serve as the fora for the preparation of issues that greatly concern us. For instance, financial market legislation is largely based on EU directives. Traditionally, the Bank of Finland has served as the channel for developing the competence for these drafting tasks – and I find this to be even more true today. I must say that it is great that financial sector competence can now be found virtu-ally under the same roof – in the Bank of Finland and the Financial Supervisory Authori-ty adjacent to it. In a small country, this brings cost efficiency and synergies.
Dear friends,
I have loved this work and have been happy to be able to contribute to European stability and integration, the foundations of which remain solid despite some occasional turbulen-ce. Reliability and independence are vital hallmarks of central banks. I think it's great that these epithets are associated with the Eurosystem and the Bank of Finland.
In my work, I have been guided by the pursuit of openness, interaction and deliberation. I have tried to learn from the brave visionaries. Without critical discussion, without sharp questioning, things do not move forward as they should. The dangers of herd behaviour and opportunism were strikingly revealed by the recent financial market crisis. Although the agreement and consensus approach is considered to be the strength of small societies, it is important to bear in mind that a 'no questioning and no challenging' approach poses a larger threat in small circles where matters easily become personalised. In this respect, we have much to learn from the young, for example Sofi Oksanen. She has often enough acted as our 'wake-up call' by encouraging us to open our mouths.
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I wouldn't be true to myself if I didn't say a few words about the role of women. I have been a feminist all my life, which also means that I am a firm believer in equal oppor-tunities for men and women. In this area there is still much work to be done in the Fin-nish society. Considering the crucial role played by women in the build-up of welfare in post-war Finland, it is utterly amazing that there are so few female executives and wom-en in higher posts in the administration in this country. Speaking as an economist, I chal-lenge you: can we afford not to use the recognised high skills of Finnish women?
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Dear friends,
It feels a bit strange to celebrate my farewell party here at Ritarihuone, the House of the Nobility, a building that can justly be considered to represent the bygone days of social inequality. The obvious reason for choosing this place is that it is well suited for our con-cert, which the Bank's facilities are not.
But on closer thought, maybe this building provides rather appropriate surroundings for the close of my career, after all. My farewell party here at Ritarihuone is symbolic of contemporary egalitarian Finland, which is where we want to live. I come from the countryside, from very ordinary circumstances, and have the welfare society to thank for giving me the opportunity for good schooling and a path to a career worthy of celebration in the parlour of the nobility.
I now wish to thank all of you for your cooperation and support during the past years – you have made these years truly fortunate ones for me.