MANAGEMENT OF THE RESERVES OF THE EUROPEAN CENTRAL BANK

Foreign exchange reserves of the European Central Bank

The foreign exchange reserves of the European Central Bank consist of

   a US dollar portfolio

   a Japanese yen portfolio

   gold and

   the Special Drawing Rights (SDRs) of the International Monetary Fund.

Eesti Pank's participation in the reserve management of the European Central Bank

In addition to managing Eesti Pank's own financial assets, Eesti Pank actively participates in the management of the ECB's reserves.

On the basis of the currency specialisation model Eesti Pank cooperates with Suomen Pankki (the Bank of Finland) in managing a share of the ECB's yen-denominated security portfolio. The development of an investment strategy, the division of operational procedures and analysis of the portfolio yield is carried out in close cooperation with colleagues from Suomen Pankki.

The ECB's share of the reserves is managed under the investment rules laid down by the European Central Bank.

The euro area's central banks, including Eesti Pank, are entitled to a share of the European Central Bank's profit. After the statutorily required amount has been transferred to the ECB's general reserve fund, the remainder of the earned profit is distributed proportionally among national central banks as shareholders of the European Central Bank, in proportion to their contributions.