Model for cooperation between authorities in a financial crisis revised
The authorities have agreed on information exchange and other cooperation in areas involving the prevention, management and resolution of financial market crises.
The revised Memorandum of Understanding on the management of financial crises has been signed by the Ministry of Finance, the Ministry of Social Affairs and Health, the Financial Supervisory Authority, the Bank of Finland and the Financial Stability Authority.
The Memorandum of Understanding (MoU) aims to strengthen the crisis management capabilities of the authorities by ensuring that the parties exchange information as required by the crisis. In addition, the authorities seek to establish more efficient and systematic cooperation in order to optimally prevent, manage and resolve financial crises.
Cooperation in normal conditions and disruptions
The previous MoU was signed in 2007. Since then, financial market legislation and the structure of authorities have changed significantly. In connection with the revision work, the authorities noted that the cooperation model outlined in the MoU will continue to provide a good framework for flexible cooperation – both in normal conditions and in the event of disruptions.
In normal times, the authorities use the MoU to maintain and improve crisis management preparedness. They will also follow the MoU in situations where the stability of the financial markets is at risk, or severe disruptions in the financial system could be expected.
Parties will exchange information and improve preparedness
The parties will work together to improve their preparedness for mutual cooperation and their ability to manage crises affecting the financial system. Forms of cooperation include
- regular exchange of information on the current situation in the domestic financial and insurance markets,
- developing the analysis methods needed to forecast and deal with crises, and developing operational capabilities and preparedness, and
- organising exercises to enhance capabilities for cooperation in crises.
The Memorandum of Understanding is not legally binding, nor does it affect the parties’ statutory obligations or powers.
Jaakko Weuro, Senior Ministerial Adviser, Ministry of Finance, tel. +358 2955 30322, jaakko.weuro(at)gov.fi
Pauli Kariniemi, Director General, Ministry of Finance, tel. +358 2955 30210, pauli.kariniemi(at)gov.fi
Heli Backman, Director General, Ministry of Social Affairs and Health, tel. +358 2951 63668, heli.backman(at)gov.fi