Management of financial assets

One of the statutory tasks of the Bank of Finland is the holding and management of foreign reserves. Holding foreign reserves helps in preparing for future uncertainties and risks. The core principles and objectives of central banks’ investment operations are typically safety, liquidity and return. At the Bank of Finland, responsibility has been added alongside these as a fourth objective guiding investment decisions and as an integral part of daily investment activity.

The Board of the Bank of Finland decides on the amount of the Bank’s financial assets in accordance with the Agreement on Net Financial Assets (ANFA) concluded between the Eurosystem central banks. The Board also takes a decision on the Bank’s investment policy each year. For a detailed breakdown of the Bank of Finland’s financial assets, please see the Bank’s Annual Report.

The risks associated with the Bank of Finland’s financial assets consist of market risk, credit risk and liquidity risk as well as operational risk involved in investment activity. The limits set for investment risk ensure prudent management of the Bank’s financial assets.

In addition to managing its own financial assets, the Bank of Finland manages part of the ECB’s foreign reserves together with the Estonian central bank, Eesti Pank. Management of the ECB’s foreign reserves has been distributed among the Eurosystem national central banks according to their respective capital keys. In the management of the ECB’s foreign reserves, the emphasis is on security and liquidity, as the key purpose of the reserves is to ensure the availability of sufficient resources for the Eurosystem’s potential foreign exchange interventions (for further information on the management of the ECB’s foreign reserves, please see the ECB’s Annual Report