Finland: Financial Sector Assessment Program-Technical Note on Macroprudential Policy Framework and Tools

This technical note highlights Macroprudential Policy Framework and Tools for the Finland Financial Sector Assessment Program. The institutional framework for macroprudential policy in Finland, formalized in 2014, is mostly in line with the IMF guidance for effective macroprudential policymaking. Systemic risk monitoring is well organized and conducted on a timely basis, especially in the household sector. The sustained increase in residential housing loans is of important systemic concern, and the authorities have taken measures to contain relevant risks. The ongoing development of Finland’s positive credit register will provide microdata on household indebtedness and income, which are useful to analyse vulnerabilities and to calibrate policy, and may be useful to authorities when considering the distributional consequences of macroprudential policies. Moreover, the analysis of corporate sector vulnerabilities should be as developed as that of household sector vulnerabilities, and it would be beneficial to address related data gaps.