Central government borrowing is used for funding redemptions of central government debt and possible government budget deficits. The State Treasury carries out borrowing by issuing Treasury bills, bonds and private placements via banks. Purchasers of government debt, i.e. investors, mainly comprise large institutions such as pension institutions, insurance funds and banks. Government debt securities are traded in the secondary market.
Borrowing is primarily performed in the international investment market, with both banks and investors mainly based outside Finland. Borrowing does not entail currency risk, since government debt is denominated in euro after currency hedging.
Government funding operations are characterised by an avoidance of risks. The managed risks are market risk, funding risk, credit risk, legal and operational risks and model risk. The Ministry of Finance provides the State Treasury with guidelines for debt and cash management on an annual basis, within the framework of which the State Treasury operates on the financial market.
The State Treasury is responsible for Finland's interaction with credit rating agencies.
For further information on Finland's central government debt management and credit ratings, please visit www.treasuryfinland.fi.