The Finnish government’s borrowing strategy is based on benchmark bonds denominated in euros. The government issues 2–3 new serial bonds every year, which, at the time of issuance, immediately achieve the size, liquidity on the secondary markets and sufficiently wide investor base required of the benchmark bond. Once the serial bonds have achieved benchmark bond status, the government’s primary dealer banks quote bid and ask prices for them.
For the initial issuance of benchmark bonds, the government uses so-called syndicated bond issues. This ensures that a new loan has a broad investor base and fosters price stability in the secondary market. The stock of outstanding benchmark bonds can be increased at a later date, through auctions arranged by the State Treasury.
In addition to benchmark bonds, the government can also issue long-term debt instruments in currencies other than the euro. Under the framework of the Euro Medium Term Note programme, bonds can be issued in different currencies. The EMTN programme serves as an alternative form of funding, complementing the benchmark bond strategy.
Treasury bills provide the government with a flexible, short-term financing channel. One year is the maximum maturity period for Treasury bills. The State Treasury issues Treasury bills in auctions and, depending on investor demand and liquidity requirements, also on other occasions.
In cash management, the key task is maintaining and securing the government’s liquidity management. Depending on the situation at the time, the State Treasury can invest its cash funds or take out short-term loans from the financial markets.