The dominant position of the US dollar exposes other countries to changes in the economy and domestic policies of the United States, while also creating global systemic risks. The role of the dollar is expected to decrease with time as the roles of other economic areas and their currencies increase. Given the lack of a realistic competing currency, however, it is rather unlikely that the status of the dollar will weaken at the moment, which highlights the need for cooperation in terms of managing risks to the international financial system.

The Finnish, Swedish, Norwegian and Danish banking sectors have broadly similar strengths and weaknesses. Their profitability is strong, capital adequacy solid, and loan losses have been at historically low levels for a long time. On the other hand, the national banking sectors are large and concentrated and their systemic risks relate largely to lending to the residential and commercial real estate markets.

Finland’s domestic financial system has continued to function well despite the prolonged recession. Short-term risks to the stability of the domestic financial system relate particularly to weaker-than-forecast developments in the Finnish economy and risks developing on the international financial markets.

The Finnish banking sector’s key vulnerabilities are structural and linked to the Nordic housing market. The result of the Bank of Finland’s and Financial Supervisory Authority’s (FIN-FSA) joint stress testing exercise indicate that the Finnish banking sector is resilient enough to withstand a severe economic and financial crisis on the Nordic housing market. In the stress test, the Common Equity Tier 1 (CET1) capital ratio for the banking sector weakens by 1.4–4.7 percentage points, but still remains above minimum capital requirements. The major losses incurred by the banks would stem from an increase in credit risks, whereas market risks have a clearly minor importance for banks’ capital adequacy.

Investors’ optimism on the financial markets can rapidly turn to risk aversion if global economic or political uncertainty increases. Longer-term risks related to indebtedness and the housing markets are considerable, especially in emerging economies, although the Nordic countries, for example, are also vulnerable. The condition of the banking sector and public finances gives cause for concern particularly in some euro area countries. In addition, uncertainties regarding financial regulation have increased in the United States.

The Finnish financial system has operated reliably. The probability of serious disruptions related to economic and credit cycles is small in the immediate future. The structural vulnerabilities of the Finnish financial system have, however, increased, against a backdrop of household debt accumulation and changes in the structure of the banking system.

The primary purpose of the macroprudential measures that restrict lending for house purchase is to reduce the economy’s exposure to risks stemming from high household indebtedness. These risks are realised when indebted households respond to disturbances in the economy by sharply reducing consumption. Macroprudential policies that impose capital buffer requirements for banks, on the other hand, are designed to ensure that the banking system's lending capacity and ability to function remain satisfactory under all economic conditions.