The Banking Environment
Economic and political environment
Finland is a parliamentary republic. It has 5,2 million, 15.5 inhabitants per square kilometre
Finland has two official languages: Finnish and Swedish.
Finnish, a Finno-Ugric language, is spoken by 92% and Swedish by 5,6% of the population. Sami (Lappish) is the mother tongue of about 1,700 people.
Finland has been a member of the European Union since 1995 and then became the only Nordic country to have adopted EMU.
Export trade was 67,88 billion USD in 2005 worldwide. The main export partners are Sweden, Germany, Russia, UK, US and The Netherlands. Import trade was 56.45 billion USD in 2005 worldwide. The main import partners are Germany, Sweden & Russia, The Netherlands, Denmark, UK & France.
Local time in Finland is CET+1.
Banking in general
In the past decade mergers and co-operation agreements have helped transform the banking sector in Finland more effectively than in Europe generally.
The central bank is the Suomen Pankki (known in English as the Bank of Finland or BoF). It is a member of the European System of Central Banks. The other important institution in the banking sector is the Finnish Bankers’ Association. All major banks are members of the association.
The role of the Finnish Bankers’ Association is important in the standardisation of services and development of interbank payment systems. The interbank payment systems are based on direct contact with each other via data networks. Unlike in many other countries, the Finnish banks don’t have a separate clearinghouse.
Financial supervision is vested in the “Financial Supervision Authority”.
All payment traffic in Finland is based on the giro system and bankcards. Cash is still used for minor purchases. 90% of all payments are electronic. It is aimed to achieve 99% automation by 2010.
Finland has adopted the EU regulation on cross-border payments.
Current accounts in EUR and foreign currencies are offered. Interest can be applied for credit balances depending on the currency and the balance held.
Overdraft facilities are granted. Terms and conditions are negotiated on a case by case basis.
The “ European Interbank Offered Rates “ ( EURIBOR) are the benchmark interest rates in EUR.
Currency
The Finnish currency unit is the euro. Finland was one of the 12 EU countries that started using euro cash in 2002.