Confidence in the financial system is created through persistent action : Editorial

Abstract

The tightening of financing conditions can expose the vulnerabilities and risks that were built up during the period of low interest rates, both in Finland and elsewhere. Although Finland’s banking sector is well placed to withstand any real-life stress test that it may face, there is good reason to be properly prepared for an increase in credit and liquidity risks. Financial stability is founded on confidence, and the basis for this is created through persistent action. Occasional crises should not be allowed to delay the work being done to strengthen the resilience of the financial system.