The implementation of monetary policy means the implementation of monetary policy decisions made by the Governing Council of the ECB. The Eurosystem implements monetary policy mainly by adjusting the quantity, price and maturity of central bank funding granted to monetary policy counterparties, meaning primarily banks.
As part of the Eurosystem, the Bank of Finland is responsible for implementation of the ECB's monetary policy in Finland. The counterparties are Finnish credit institutions or Finnish subsidiary banks or branches of foreign credit institutions.
Banks seek financing in monetary policy auctions organised on a regular basis. The operations of the central bank have an impact on short-term interbank money market rates, based on which the most common reference rates for retail loans to the public, such as the Euribor rates, are determined.
During the financial crisis and thereafter, the Eurosystem has used what are known as non-standard monetary policy measures, the most significant being outright purchases of securities on the markets.
Another integral part of the implementation of monetary policy is the risk management of central bank funding, and it is a function which has been separated from the use of the monetary policy instruments. In the risk management process, the financial soundness of banks acting as, or applying to become, monetary policy counterparts is assessed and the collateral requirements for access to central bank funding defined.