Global upheaval : Financial stability at risk from power politics

Abstract

Finland’s financial system is stable. However, aggressive power politics and erosion of the international rules-based system could undermine this stability. A slow recovery in the Finnish economy would prolong the downturn in the housing and real estate markets and increase the risks for banks and investors. Given the challenging global circumstances, the banking sector’s resilience should be maintained and reinforced further by improving the capacity of macroprudential policy to react to crises in the financial system. The EU financial system should be strengthened and diversified by implementing the plans for a Savings and Investment Union.