Finland’s Financial Watchdogs: The Financial Stability Authority and the Deposit Guarantee Scheme

The Financial Stability Authority (FFSA), an independent agency based in Helsinki, has become a crucial player in Finland’s financial sector, safeguarding the country’s financial system. Established in 2015, the FFSA serves as both the national resolution and deposit guarantee authority. Its primary goals are to protect depositors, taxpayers, and prevent financial crises.

Responsibilities of the FFSA

The FFSA’s remit includes:

• Credit Institutions, Investment Firms, and Central Securities Depository: The agency is responsible for various functions related to these financial entities.
• Resolution Plans: The FFSA drafts and maintains resolution plans for institutions facing insolvency.
• Entering Resolution: The agency determines when an institution enters the resolution process.
• Resolution Tools: The FFSA employs the necessary resolution tools on the insolvent entity.

Deposit Guarantee System

Besides managing resolution matters, the FFSA administers the Finnish deposit guarantee system. Key functions include:

• Deposit Guarantee Fund: The fund offers securities to depositors in cases when a bank becomes permanently insolvent.
• Compensation Events: The FFSA disburses deposit guarantee compensation to affected depositors during these events.

International Collaboration

The FFSA collaborates closely with European counterparts, with the parent organization, the Single Resolution Board (SRB), located in Brussels. Finnish authorities such as the Finnish Financial Supervisory Authority, the Bank of Finland, and the Ministry of Finance are significant partners in maintaining financial stability.

Maintaining Finland’s Financial Integrity

Through its critical roles in addressing financial stability concerns, the Financial Stability Authority plays a pivotal part in preserving the integrity and trustworthiness of Finland’s financial sector.