Finland sets up reserve banking systems in wake of Ukraine war

HELSINKI, Nov 22 (Reuters) - Bank of Finland and the country’s Financial Stability Authority are introducing reserve payment systems for money transfers for consumers and banks due to what Finnish central banker Olli Rehn said was a heightened risk of cyber attack.

“Russia’s offensive in Ukraine has increased the threat of cyber and hybrid attacks also in Finland,” Rehn told members of parliament, adding that the new reserve systems were designed to prevent serious cyber attacks or prolonged telecom faults.

Due to the “changed threat situation” financial market authorities set up backup systems earlier this year which aim to secure daily payments under all conditions, Rehn said.

Bank of Finland maintains a reserve system for bank-to-bank payments while the Financial Stability Authority has built a reserve account system that will allow clients of an inoperative private bank to access their funds, transfer money, use their debit card and withdraw money in case of a prolonged fault situation.

The consumer reserve system would only be activated in a severe crisis, following a decision by the Finnish government.

“This is a system of last resort which hopefully we will never need to use,” Tuija Taos, Director General of the Financial Stability Authority, told Reuters.

Rehn said European countries do not have unified reserve banking systems and that the level of preparedness for crisis varies from one country to another.

“Other European countries have expressed a lot of interest towards our solution,” he added. (Reporting by Anne Kauranen Editing by Alexandra Hudson)