Välimäki sets out move to demand-driven monetary operations
Tuomas Välimäki described the Eurosystem's transition to demand-driven monetary operations at a Bank of Finland event in Helsinki on October 14, 2026. His focus was implementation, not the monetary policy stance.
Steering rates as reserves decline
The Eurosystem is moving towards a demand-driven framework for steering short-term money market rates, following the European Central Bank (ECB) Governing Council's March 2024 decision.
Bank of Finland Board Member Tuomas Välimäki focused on how the transition will work as central bank reserves decline and the financial system changes.
He distinguished the operational framework from the monetary policy stance: the issue is how to implement the desired stance in short-term money markets.
The central question is how monetary policy implementation will perform under these changing conditions, rather than whether policy itself needs to become tighter or looser.
Three articles frame the transition
Välimäki said the Bank of Finland was publishing three articles in Finnish and English on monetary policy implementation.
They approach the subject from different angles but share a question about the framework's performance as reserves decline.
His speech complements them by focusing on the transition itself.
The Bank for International Settlements (BIS) published the listing on October 21, 2026, with a 15-page speech PDF and presentation slides, noting that his views do not necessarily reflect those of the BIS.
Implementation, not policy direction
The transition concerns how the Eurosystem implements its chosen stance, not a change in that stance.
Declining reserves and a changing financial system frame the operational question.
The supplied excerpt gives no detailed transition timetable.