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The regulatory and supervisory tightening since the global financial crisis has protected banks from new crises. Research findings indicate that the benefits achieved through regulation and macroprudential policy have exceeded the disbenefits.

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.

The regulatory and supervisory tightening since the global financial crisis has protected banks from new crises. Research findings indicate that the benefits achieved through regulation and macroprudential policy have exceeded the disbenefits.

The resilience of Finland’s financial system has remained robust. Changes in financial regulation should take account of anticipated developments in the operating environment so that we are not simply fighting old crises.

Higher interest rates have brought Finland’s housing market to a halt. If interest rates are cut and the economy recovers, this will ease debt servicing for households and businesses and strengthen the housing market. There would also be fewer risks to financial stability in Finland.