Bank of Finland says refinancing operations will matter more for steering rates as reserves shrink

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Bank of Finland says refinancing operations will matter more for steering rates as reserves shrink

14 October 2026

The Bank of Finland has said that the role of the Eurosystem's refinancing operations in steering interest rates will grow as central bank liquidity declines. Member of the Board Tuomas Välimäki said euro area central bank reserves total approximately EUR 2,000 billion and are shrinking as debt securities bought earlier mature. Week-long main refinancing operations and three-month longer-term refinancing operations will continue as fixed-rate tenders with full allotment. A broad range of collateral will be accepted in all refinancing operations. New longer-term structural refinancing operations and a structural bond portfolio are to follow, with details still to be decided.

Euro area central bank reserves: approximately EUR 2,000 billion Main refinancing operations: week-long Longer-term refinancing operations: three-month

Why it matters for exams: Bank exam papers ask what the Eurosystem is, what collateral and repo operations mean, and which central bank serves Finland.

UPSCBank

14 October 2026 Source: Bank of Finland

In plain words

Eurosystem The European Central Bank together with the national central banks of the euro area — The monetary authority of the euro area; the Bank of Finland is one of its national central banks.

Collateral Security pledged against a loan — Assets a bank pledges to the central bank to borrow against.