Recent economic crises have modified the Bank of Finland's market operations

Abstract

Since the global financial crisis and the European sovereign debt crisis, the traditional means used by central banks to influence economic activity and inflation have changed significantly. Once nominal risk-free interest rates fell towards zero, central banks’ ability to implement monetary policy by simply adjusting their key interest rates ceased. Instead, in recent years central banks have eased financing conditions by conducting large-scale asset purchases and offering banks refinancing on favourable terms.