Banks, Budget, Estonia, Financial Services, Legislation

The Supervisory Board will start to discuss the distribution of Eesti Pank’s profit for 2013 at the next meeting on 13 May.

Under the strategy for profit distribution, Eesti Pank aims to increase the relative level of its broad capital to the average level of the Eurosystem, the central banks of the euro area, as the Governing Council of the European Central Bank considers the balance of risks to capital of the Eurosystem as a whole when making joint monetary policy decisions for the euro area.

The ratio of Eesti Pank’s broad capital to the risk assets used for monetary policy is one of the lowest of any of the central banks of the euro area.

On Tuesday the Supervisory Board of Eesti Pank confirmed the statute of the Fiscal Council. The Fiscal Council is an independent advisory body charged with assessing Estonian fiscal policy.

The Fiscal Council will meet whenever necessary, but at least five times a year. The statute requires the Council to give its opinion on the forecasts for the macro economy and state financing and on the budget strategy and how the goals of the structural budget position of the general government are being achieved.

The Council has six members. Under the statute, the Council’s Chair, Vice-Chair and four members are nominated to office for a period of five years by the Eesti Pank Supervisory Board at the proposal of the Governor of the central bank.

Members of the Council must have unblemished reputations, a Master’s degree or equivalent in economics, and experience that will help the Fiscal Council to fulfil its functions. Members of the Fiscal Council may not have a job or other position or take part in any activity that could affect the independence of the Council in its work.

The Chair of the Council will receive a monthly salary of 780 euros, which is 15% of the highest salary level for civil servants, and members will receive 520 euros, which is 10% of the highest salary.

At the meeting of the Supervisory Board, Eesti Pank Governor Ardo Hansson gave board members a regular review of the state of the economy in the euro area.

The next meeting of the Eesti Pank Supervisory Board will be on 13 May.