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Mortgage lending can be reined in by setting higher risk weights for loans. There are, however, differences in calculation methods. Harmonisation would enhance a level playing field between banks.

Insurance companies’ role as major investors can cause market disruptions if the companies have to resort to forced sales.

The crisis is affecting banks’ business models. In the euro area, bank profitability has been eroded by the path of the economy, weak credit developments and the prolonged period of low interest rates.

The financial crisis has increased our understanding of cross-border stability threats. Overheating on the international financial markets would push up asset prices and possibly also increase the supply of loans.

Accommodative monetary policy is necessary for price stability and economic recovery. However, it may create risks for financial stability.

According to the Bank of Finland’s stability report, the financial system has remained stable despite the lack of improvement in the Finnish economy. Weak developments of the Finnish economy and risks building up on the financial markets, such as growing search for yield and low interest rates, could expose the system to risks.

Confidence is vital to the financial system. Could the next crisis stem from banks’ faltering confidence in other banks’ systems, caused by a cyber attack?

Housing debt is concentrated in the Helsinki metropolitan area and other growth centres, where housing is more expensive. A large proportion of loans is borne by a small proportion of households.

The consequences of a banking crisis could be severe in the exceptionally concentrated Finnish banking system.