New governor underlines financial stability worldwide

Suomen Keskusta (Centre Party of Finland) politician and long time economic policy decision-maker Olli Rehn was appointed on Friday as the governor of the Bank of Finland.

President Sauli Niinistö made the appointment following the suggestion by cabinet. The term of office of the governor is seven years.

Talking to the media, Rehn expressed concern with the increase in Finnish household debt and said a comprehensive credit rating system should be introduced in Finland.

Currently, Finland has a "negative" system where the credit rating of a person remains positive if payments do not remain unpaid.

A comprehensive system, used in most European countries and known also as a "positive" system, lists all the loans of a person and the payment behavior.

Rehn also said young people need better knowledge about handling personal finances.

As governor of the Bank of Finland, Rehn will be on the council of the European Central Bank.

Asked about future monetary policies, Rehn said there would be no return to the way things were handled prior to the financial crisis that began in 2008. In the future, focus will be on financial stability and prevention of build-ups of systemic risks.

"The tools used by the central banks will be more versatile. Macroprudential policies will carry a much higher weight in the arsenals of central banks than before the crisis," Rehn said.

Macroprudential policies are understood to comprise measures that make the financial sector more resilient.

Olli Rehn became a board member and one of the directors of the Bank of Finland in 2016.

He served as European Union's Commissioner for enlargement from 2004 and as Commissioner for economic affairs and the euro from 2009 to 2014. He was the Finnish minister for economic and business development until 2016.

Outgoing governor of the Bank of Finland Erkki Liikanen will retire in July when he completes his second seven-year term.