The Financial Reform in Finland

International Monetary Fund

No 1988/089, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the evolution of the Finnish financial system from a restrictive system based on credit limitations and rationing to an open system which relies on indirect, market-oriented policies. The main beneficiaries are found to be the banks and those that previously had restricted access to bank credit. Two major remaining problems are the anti-savings biases associated with the generous tax treatment of household interest payments and the cartel-like system used in providing tax-free deposits to households. The paper also challenges the argument that the reform caused a loss of monetary autonomy.

Keywords: WP; rate; interest rate; bank; market; credit rationing; market rate; penalty rate; reference rate; financial system; commercial paper; target variable; call money market; forward market; money rate; deposit rates low; excess demand; Bank credit; Credit; Loans; Deposit rates; Money markets (search for similar items in EconPapers)
Pages: 38
Date: 1988-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1988/089

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