The central bank is the Bank of Finland-the fourth oldest in Europe-established in 1811, with headquarters in Helsinki and seven branch offices. Possessing extensive autonomy though subject to parliamentary supervision, and endowed with extensive monetary and fiscal powers, the Bank is administered by a six-member board of management appointed by the president of the republic. It has an exclusive monopoly over the issuance of notes. Completing its preparations for Economic and Monetary Union (EMU), on 17 January 1997 the government submitted to the Eduskunta a proposal for a new Act of the Bank of Finland. The main purpose of the act was to prepare the Bank of Finland institutionally for Stage 3 of EMU by providing for its independence ahead of the move to a single currency, in line with the requirements set out in the Maastricht treaty.
As of 1999, leading deposit banks in Finland included: Nordea (Merita Nordbanken, the result of a merger betweeen Merita and Swedish Nordbanken, Danish Unidanmark, and Norwegian Christiania Bank); OKO Bank (the Cooperative Bank Group, the first bank in the world to offer online banking transaction services, in 1996); and the Sampo Group (the result of a merger between Sampo Insurance Company and the Leonia bank group. Eight major commercial banks and forty savings banks serve the country. Six foreign banks have branches in Finland.
In 1996 the markka stayed firm against the German mark. In the fourth quarter of 1996 Finland's three-month money-market rate, the Helibor, fell by nearly 40 basis points, from 3.48% to just 3.09%. The fall resulted in further convergence with German money-market rates.The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $37.3 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $59.8 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 4.26%.
An exchange at Helsinki (established in 1912) is authorized to deal in stocks. Stock prices have risen sharply since 1992, and in 1996 the Helsinki Stock Exchange (HEX) recorded a strong performance. In December 1996 the HEX all-share index stood38.3% higher than in the year-earlier period, making Helsinki one of the most buoyant stock exchanges in the developed world. The exchange's performance was driven by strong gains in sectors such as insurance (up 58% year on year) and metal engineering (up 35%). However, at the end of 2002, the index lost about 34% of its value since the past year, marking the third consecutive year of declining values.