FFSA and Financial Stability Fund annual financial statements for 2023 published
The Financial Stability Authority’s (FFSA) operational capability remained strong and the FFSA achieved its expected results in a turbulent economic and security situation.
The banking crisis in the United States and Switzerland resulted in market uncertainty in spring 2023 and emphasised how important it is to have an efficient banking supervision and resolution system. In the end, the impacts of the events on the European banking sector remained low. Nevertheless, the European Union’s resolution authorities monitored the situation closely and the lessons learned from the events will be utilised in the development of resolution systems.
The events in the Baltic Sea in October emphasised the importance of a high level of preparedness in the financial markets and cooperation between authorities. Finland’s NATO membership will help to open new cooperation opportunities that promote crisis management and the stability of the financial markets. In August, the Financial Stability Authority took part in the first international joint exercise of the authorities since Finland joined NATO, where the authorities from the Nordic countries, the United States and Estonia practised cooperation in a serious incident against the financial market infrastructure.
Resilience of the FFSA and banks in crisis situations was strengthened
The Financial Stability Authority further developed the ability to implement resolution tools and the cooperation between the authorities in crisis situations. An assessment tool was introduced to verify the FFSA’s own operational capability. In resolution planning, the FFSA introduced testing of resilience in terms of all Finnish banks. The FFSA implemented a resolvability assessment for banks, the results of which were distributed to the banks for the first time. Based on the assessment, there has been some progress in the resolvability of banks, albeit some bank-specific differences were also detected.
Successful transition to the maintenance of the National Emergency Account System
The FFSA maintained a high level of preparedness regarding the deployment of the National Emergency Account System that safeguards daily payments in an emergency and serious disruptions in normal circumstances. The transition from the system establishment project to the maintenance and further development phase was carried out in an orderly manner. The task of maintaining the National Emergency Account System raised the FFSA’s resource needs and operational expenses, which also resulted in the amendment of the Act on the Financial Stability Authority’s Administrative Fees.
Amount of deposits to be compensated increased, investment operations by the Financial Stability Fund started
The target level of the Financial Stability Fund, as laid down by law, is tied to the total amount of deposits to be compensated in banks operating in Finland. The target level of the Financial Stability Fund was about EUR 1.22 billion based on the data used in the calculation of 2023 payments. The amount of deposits to be compensated during 2023 grew by about 0.05 per cent, which keeps the estimate of the target level of the fund at EUR 1.22 billion. The target level of the Fund must be reached by July 2024. During 2023, the FFSA prepared the start of investment operations by the Financial Stability Fund in accordance with the decision taken by the Fund’s Board of Directors in December 2022.
Further information:
Jaakko Weuro, Director General, FFSA (jaakko.weuro(at)rvv.fi).
Find out more about the Financial Stability Authority’s financial statements and annual report for 2023 (in Finnish).
Find out more about the Financial Stability Fund’s financial statements and annual report for 2023 (in Finnish).
