Accessible summary : Russia’s invasion reminds us that the financial system needs to be well prepared to bear risks

Abstract

Finland’s financial system has remained stable, but uncertainty has increased. The general level of prices is rising rapidly at the same time as economic growth is expected to fade. Growth in unavoidable costs and in debt-servicing expenditure is squeezing the finances of many individuals and businesses. The banks are in good shape, but their credit risks could grow. Limits should be placed on household indebtedness, and banks’ ability to withstand crises should be further improved.