The Financial Stability Authority’s operations
The legislation governing the Authority’s operations
The operations, duties, administration and management of the Financial Stability Authority and the deposit guarantee scheme are governed by the Act on the Financial Stability Authority. The Authority’s duties pertaining to resolution are also governed by the Act on the Resolution of Credit Institutions and Investment Firms and the EU’s Resolution Regulation.
There are also several EU-level guidelines and regulations applicable to the Financial Stability Authority’s operations. Examples of these include the guidelines and standards of the European Banking Authority and the Single Resolution Board, which are aimed at harmonising the operations of European authorities and authorities in the euro area.
The Financial Stability Authority’s operations are guided by its rules of procedure (in Finnish) confirmed by the Director General, which include more detailed provisions on the Authority’s internal organisation and the management of its duties. The rules of procedure stipulate that the Authority’s operations are divided into two units: the Resolution Unit and the Administration and Deposit Guarantee Unit.
The operations of the Financial Stability Authority are guided by the Authority’s strategy, the performance agreement concluded annually with the Ministry of Finance (link to planning documents) and annual internal operating plans.
The management of the Financial Stability Authority
The Financial Stability Authority is led by the Director General, appointed and dismissed by the Government. The Government appoints the Director General for a five-year term and two consecutive terms at most. If the Director General is prevented from attending to the required duties, these devolve to a deputy appointed by the Ministry of Finance.
The Financial Stability Authority’s first Director General is Tuija Taos, LLM, who has served as Director General since 2015. She was reappointed as Director General effective from 1 May 2020. Reima Letto, LLM, M.Sc. (Econ.), serves as the deputy to the Director General.
The Director General decides on the matters within the Authority’s purview. The Director General manages the Authority’s operations, is responsible for the achievement of the Authority’s objectives as well as its operational development and performance.
The Director General’s responsibilities include, for example:
- Setting the Authority’s objectives, achieving the objectives and monitoring their achievement
- Developing FFSA as a workplace, developing its administration and FFSA’s human resource policy
- International cooperation and FFSA’s representation in European cooperative bodies
- FFSA’s communications
The Financial Stability Authority has a Management Group defined in the rules of procedure confirmed by the Director General. The Management Group consists of the Director General and the Heads of the Resolution Unit and the Administration and Deposit Guarantee Unit appointed by the Director General. The Management Group supports the Director General in the management and development of the Authority and monitors the drafting and implementation of the matters within the Authority’s purview.
The Head of the Resolution Unit is currently Reima Letto, LLM, M.Sc. (Econ.), and the Head of the Administration and Deposit Guarantee Unit is Saija Kuivalainen, M.Soc.Sc. The duties of the heads of the units include managing the operations of their respective areas, being responsible for the achievement of the performance targets of their unit and carrying out supervisory tasks. The heads of the units operate under the Director General.
The Authority’s other administrative bodies
The Financial Stability Authority has an Advisory Board consisting of representatives appointed by the Authority, the Ministry of Finance, the Bank of Finland and the Financial Supervisory Authority. The task of the Advisory Board is to secure cooperation and communication between the above-mentioned authorities in matters falling within the competence of the Authority. The Ministry of Finance appoints the Advisory Board for three years at a time.
The Financial Stability Fund, managed by the Authority, has a Board that decides on the risk management, investment planning and principles of the Fund and directs the investment of the assets. The Ministry of Finance appoints the Board for three years at a time. At least two of the members of the Board, and their deputies, are appointed based on proposals made by the advocacy organisations of credit institutions and amalgamations of deposit banks.
Funding and operating costs
The costs arising from the Financial Stability Authority’s operations are covered by administrative fees collected from the institutions under its purview. The fees are governed by the Act on the Financial Stability Authority’s Administrative Fees.
Administrative fees are collected annually at an amount that, at most, equals the costs specified in the Financial Stability Authority’s confirmed budget.