Banks, Estonia, Export, Financial Services, Foreign trade , Statistics

According to the Eesti Pank (Central Bank of Estonia), a cross-border payment is made when an Estonian entrepreneur sells milk to Lithuania or an electronics company moves money from Sweden to Estonia. Bloomberg’s claim that these 900 bln are made up of non-resident flows is therefore misleading. The 900 bln euros do contain non-residents’ payments, but they only make up one part of the sum. These are cross-border payments, and Estonia, being a small and open economy, has a lot of export and import. Exports and imports mean that money moves across country borders, and this constitutes cross-border payments. Bank clients made 442 bln euros’ worth of payments from abroad to Estonia in 2008-2015, and Estonia sent 446 bln euros in payments abroad during the same period.

Cross-border payments certainly include non-resident flows, but the central bank does not collect separate statistics for these transactions. The statistics collected by Eesti Pank can establish whether a payment is sent to a foreign bank or is received from a foreign bank, or whether the payment moves between banks that operate in Estonia. However, central bank statistics do not hold information on whether the person who initiated a payment in a foreign or an Estonian bank was a resident of Estonia or not.