Finland's Financial Markets

The main function of the financial markets is to facilitate the flow of finance from economic operators in surplus to those in deficit. Within the various sectors of the economy, both households and businesses are either net lenders or net borrowers. The financial markets can be roughly divided into direct finance (the securities market) and indirect finance, which is characterized by the important intermediary role of various types of financial institution.

Division of responsibilities for the financial markets between the various authorities

The Ministry of Finance is responsible for banking and securities market legislation and related national and international cooperation. The Ministry's policy on the financial markets seeks to develop the markets and ensure their stability and efficiency, balanced competition, and the diversity and accessibility of financial services. The Ministry also makes an important contribution to the work of international financial institutions and organizations.

The Bank of Finland is responsible within the European System of Central Banks for monetary policy and executing monetary policy decisions as well as to contribute to the stability of payment and financial systems.

The Financial Supervision Authority supervises the banks, other credit institutions and the securities markets. The Ministry of Social Affairs and Health is responsible for legislation relating to the insurance market, while supervision of insurance and pension institutions is the task of the Insurance Supervision Authority.

The changing operating environment on the financial markets puts a premium on cooperation between the various authorities charged with responsibility for market-related issues. There is continuous cooperation and exchange of information in respect of both market stability and legislation.

International cooperation

In stability and legislative issues, the Ministry of Finance's most important international cooperation network is formed by the various EU committees and working groups. The financial market supervisory authorities and central banks (ESCB) also have their own international cooperation networks within the EU, but in addition to this they work closely with the Commission and ministries on EU development projects.

Financial markets operators

Banks (credit institutions) or investment firms with a licence to operate in a Member State of the European Union are entitled to offer their services throughout the EU.

Organizations such as Federation of Finnish Financial Services, the Finnish Association of Securities Dealers and the Finnish Association of Mutual Funds, which represent financial markets operators, contribute to legislative development by, for example, commenting on development projects or participating in legislative working groups.

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