Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211903 
Authors: 
Year of Publication: 
2001
Series/Report no.: 
Bank of Finland Discussion Papers No. 25/2001
Publisher: 
Bank of Finland, Helsinki
Abstract: 
This paper presents the salient aspects of Finland's monetary and exchange rate policies during the run-up to monetary union in the 1990s.In the course of slightly more than a decade, Finland's monetary and exchange rate policies were thoroughly revamped.The remnants of heavy regulation were removed and a market-based financial system was put in place.There were serious problems associated with the liberalisation process in the early part of the decade, the most noteworthy being an economic and banking crisis. Finland's financial system nonetheless developed rapidly and became a more integrated part of the global system.As regards exchange rate policy, almost all varieties of exchange rate regime were tried.A fixed rate regime based on a currency index fell apart in the early part of the decade and was replaced by a floating rate system.Later, in 1993, this was combined with an inflation-targeting monetary policy strategy.At the start of 1995 Finland joined the European Union, and in October 1996 the markka was joined to the EU's Exchange Rate Mechanism.The improvement in financial and price stability that followed the economic crisis facilitated the adjustment to the euro area's single currency and single monetary policy at the start of 1999, which was accomplished without serious problems.
Subjects: 
monetary policy
foreign exchange policy
EMU
euro
monetary policy arrangements
Persistent Identifier of the first edition: 
ISBN: 
951-686-757-X
Document Type: 
Working Paper

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