Latest articles and blogs
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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.
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Finnish household debt accumulation follows economic cycle
Over recent decades, Finnish households have constantly accumulated debt in relation to their income. The household DTI ratio is projected to stabilise in the immediate years ahead as the growth in the housing loan stock abates.
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Nordic housing market risks can affect Finland’s economy
The rapid rise in house prices has increased the risks on the housing markets of the other Nordic countries. The risks from Sweden’s housing market and growing household debt can very easily spread to Finland.
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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.
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A debt-to-income cap would dampen economic fluctuations
Based on an analysis by the Bank of Finland, the introduction of a debt-to-income cap would have only a moderate impact on long-term economic growth. A debt-to-income cap could dampen economic fluctuations when compared with the current loan-to-value cap.
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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.