Financial Crime World

The Role of the Bank of Finland in Ensuring Compliance with Financial Regulations

The Bank of Finland plays a crucial role in ensuring compliance with financial regulations and standards for banks operating in Finland. As a member of the Eurosystem, the bank is responsible for maintaining and developing payment systems that facilitate smooth financial transactions.

Payment Systems Maintained by the Bank of Finland

  • TARGET2: The Bank of Finland operates TARGET2, which enables participating central banks to settle payments between themselves and their counterparties in other countries. This system facilitates real-time interbank payments.
  • T2S (TARGET2-Securities): The bank also operates T2S, a securities settlement system that ensures secure and efficient transfer of securities.
  • TIPS (Target Instant Payment Settlement): The Bank of Finland operates the TIPS system, which facilitates instant payments.

Supporting Local Counterparties

The Bank of Finland provides support to local counterparties when problems arise with payment and settlement systems. This includes:

  • Making payments on behalf of a party who is unable to do so due to technical issues.
  • Providing guidance and advice on the use of payment and settlement systems.

Development of New Systems and Technologies

The Bank of Finland is involved in the development of new systems and technologies to improve efficiency and reduce costs for banks operating in Finland. Examples include:

  • T2-T2S Consolidation Project: This project aims to combine the TARGET2 and T2S systems into a single system, making it easier to manage liquidity and reducing the complexity of operations.

Importance of Reliable Payment Settlement Systems

As a user of payment and settlement systems itself, the Bank of Finland recognizes the importance of reliable payment settlement systems in implementing monetary policy. The bank’s investment process relies on these systems, as do its other functions such as collateral management and securities trading.

KEY POINTS

  • The Bank of Finland is responsible for maintaining and developing payment systems.
  • The bank provides guidance and advice on the use of payment and settlement systems.
  • The Bank of Finland operates the T2S system and the TIPS system.
  • The bank supports local counterparties when problems arise with payment and settlement systems.
  • The Bank of Finland is involved in the development of new systems and technologies to improve efficiency and reduce costs.