Latest articles and blogs
-
Climate change and biodiversity loss as systemic threats to financial stability in Finland
Climate change and biodiversity loss pose threats to financial stability. The financial sector in Finland seems to have less exposure to emissions-intensive businesses than in many other euro area countries, but the risks surrounding the transition to carbon neutrality can hardly be avoided in Finland either.
-
Finland’s banking sector could withstand even a harsher recession than forecast
The capital position of Finland’s banking sector is expected to strengthen in the immediate years ahead, provided that interest rates and the economy develop in line with forecasts. In a very severe economic crisis, the capital position would weaken significantly but would still remain adequate.
-
Climate change must be fought – what does PACTA say about the transition risks for banks?
The need to rapidly reduce carbon dioxide emissions will adversely impact the operations of many companies, and may make old operations unprofitable. Loan portfolio risks can be assessed by combining company-specific information on technologies and emissions with corporate loan portfolio data.
-
Large structural risks require banks to hold buffers for a rainy day
Based on a stress test conducted jointly by the Bank of Finland and the Financial supervisory Authority, Finnish banks are well placed to weather a serious crisis on the Nordic housing markets.
-
Moderate growth in Finnish companies’ non-performing loans
In an economic crisis there can be a risk of a credit slump in which loan losses weaken banks’ ability to extend credit. During the COVID-19 pandemic the risks of corporate lending have grown, but substantial loan losses have been avoided.
-
New stress-testing framework to assess the capital adequacy of Finnish banks
The Bank of Finland and Financial Supervisory Authority’s new stress-testing framework can be used to assess the ability of Finnish banks to cope in severe domestic or Nordic economic crises.
-
Increased flood risks caused by climate change will also affect banks
Due to climate change, extreme weather events will become more frequent, resulting in material damage to buildings and other infrastructure. In Finland, for example, this will probably increase the risk of coastal floods.
-
Corporate credit risk affected by business cycles and industry factors
Finnish banks have granted relatively little credit to those industries most vulnerable to bankruptcies. This has helped minimise banks’ corporate credit risks.
-
Instruments designed to mitigate indebtedness
The aim of the loan cap is to rein in household indebtedness and prevent housing price bubbles. Finland badly needs other instruments that can also restrict indebtedness.
-
Conversion of Nordea subsidiaries into branches – Nordic interconnectedness increases
Nordea Group is merging its large Nordic subsidiaries into the Swedish parent, which is supervised by Sweden’s supervisory authority. In Finland, the significance of the change is increased by Nordea’s large market share.
-
What would Brexit mean for the financial markets?
On 23 June 2016, the United Kingdom will hold a referendum on whether to remain in or leave the European Union. The economic implications will largely depend on the arrangements for economic relations between the EU and the UK.