Regulatory setting

The State Treasury Finance unit manages the central government’s debt and liquidity, and specified funding arrangements. Debt management covers both central government borrowing and the central government debt portfolio. Liquidity management concerns investment of central government cash funds.

Regulatory setting and organisational division of functions

Under the Constitution, the Finnish Government may borrow funds with parliamentary assent. The assent must include the maximum value of the new borrowing or debt. Parliament has authorized the Government to raise funds, provided that the nominal value of central government debt does not exceed 110 billion euros until further notice, and that at the time of borrowing, the value of short-term debt of maximum term of 12 months does not exceed 15 billion euros of the total debt.

Parliament has further authorised the Government to take out short-term loans at its discretion in order to secure the State’s liquidity, and to enter into derivative contracts associated with risk management of central government debt. The parliamentary decision of 1 Oktober 2009 on changes in the Government’s borrowing authority came into effect on 1 January 2010.

Based on Parliament’s authorisation of the Government, the Ministry of Finance as a part of the government has authorised the State Treasury to implement central government borrowing in accordance with the parliamentary assent, and, when necessary, to take out short-term loans in order to safeguard the central government’s liquidity, as well as to enter into derivative contracts required by risk management associated with debt management under conditions determined by the Ministry of Finance and under its direction. The State Treasury is a central administrative agency operating under the Ministry of Finance.

The Ministry of Finance provides the State Treasury with guidelines on debt management and oversees their implementation. The guidelines set out e.g. the general principles and objectives of debt management, the instruments to be employed in debt management, and the risk limits and other restrictions to be observed. The State Treasury reports regularly on debt management to the Ministry of Finance. The Government submits financial statements to Parliament annually, setting out the state of the national economy and reporting on the productivity of the Ministry of Finance administrative sector.

Parliamentary Resolution on Amending the Council of State Borrowing Authority 739/2009