Banks, Estonia, Financial Services
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Tuesday, 24.06.2025, 06:10
Eesti Pank established as its long-term objective to increase the reserve volume by 3.5 times
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The Supervisory Board decided at their regular meeting on Tuesday that the level of Eesti Pank’s equity capital needs to be the same size as is the central bank’s participation in the Eurosystem. The decision was based on the consideration that due to the euro area financial crisis, the volume of Eesti Pank’s risk assets has grown to a large extent, writes LETA.
The decision means that the bank’s equity capital must increase from the current 0.37 billion euros to 1.31 billion. Right now, the volume of Eesti Pank's own capital is 0.07% compared to that of the Eurosystem, whereas our central bank's participation in the Eurosystem is 0.26%.
“The Supervisory Board’s decision will ensure the credibility of Eesti Pank. The central bank’s risks have increased and reserves must comply with risks. People will trust the central bank if it is financially independent,” said Jaan Männik, Head of the Supervisory Board.
In addition, the Supervisory Board decided that until fulfilling the goal of larger reserves, no more than 25% of the central bank’s previous year’s profit will be allocated to the state budget.
Eesti Pank’s 2011 profit was 22.7 million euros. The Supervisory Board has decided to allocate three-quarters thereof to the central bank’s reserves and a quarter (5.7 million) to the state budget.
Eesti Pank’s 2011 profit from the Eurosystem’s joint action (monetary policy and cash issuance) was 20.2 million euros and from its own financial transactions 14.7 million euros. Other income was 6.2 million euros of which the sale of coin metal brought in 3.5 million euros and the sale of collector coins and numismatic products 2.1 million euros. Eesti Pank’s operating expenses were 19.4 million euros.
Since 1992, Eesti Pank has transferred a total of 109 million euros of its profit to the state budget. There have been five years, when the central bank has not shared its profit: in four cases the year ended with a loss and in one case it could be seen that the next year would end with a loss.
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