Eesti Pank’s strategy for 2020-2024 was put together in autumn 2019. The need to bring the strategy up to date and review it is assessed each year.

The strategy above all presents a general picture of all of the most important activities and operations of Eesti Pank. Then it focuses on five main goals. These are the development tasks for the next five years, which can in themselves lead to larger changes.

Eesti Pank’s mission

As the central bank of the Republic of Estonia and a member of the Eurosystem, we contribute to the sustainable development of the Estonian economy and to increased prosperity for Estonia. We keep price growth moderate, setting a joint monetary policy together with the other central banks of the euro area and implementing it in Estonia. We maintain the stability of the Estonian financial system by helping to set policy for the financial sector. We ensure that cash is of good quality and promote a safe and efficient payment environment. We give an independent assessment of the state and outlook of the economy, we advise the government on important matters of economic policy, and we produce high-quality statistics.

Eesti Pank’s vision

The positions and actions of Eesti Pank are considered in Estonia and abroad. Eesti Pank is an efficient and innovative organisation and is the most highly regarded authority in Estonia on questions of finance and the economy at the macro level.

The operating environment for Eesti Pank in 2019 and its main tasks

The main functions of Eesti Pank are set out in §2 of the Eesti Pank Act. In carrying out these functions, account must be taken of the current state of the economy, the development of the financial sector, and the strategic priorities of the central bank.

Eesti Pank plays an active role in setting monetary policy in the euro area and in the related decision-making. To do this, the processes that affect the Eurosystem as a whole and the Estonian economy alone need to be thoroughly analysed. The purpose of economic research at the bank is to provide information that can be used in decisions on monetary policy and financial stability, and to give support to experts and managers from the central bank in discussions of economic policy. Eesti Pank ensures the quality of the analysis by working together with other central banks and with research institutions and universities in Estonia and abroad.

The euro area economy was showing signs of recovery until 2018. This gave grounds for believing that inflation was picking up and would reach the target set by the European Central Bank of close to 2%. This optimism has by now faded. Tensions in trade policy and ongoing political uncertainty have had a baleful influence on economic activity and investment, and growth in the economy has slowed. In consequence monetary policy is likely to remain supportive of inflation in the coming years, and discussions about extraordinary monetary policy measures, including negative interest rates and the termination of the broad-ranging asset purchase programme, will probably be postponed into the more distant future.

The decisions of the central bank about the price of money and how much of it there should be are passed on to households and businesses through the financial system. Monetary policy is enacted through the transactions of the central bank with the commercial banks, which then issue loans and take in deposits. During this, the financial soundness of banks as counterparties is assessed, and monetary policy operations are carried out. The commercial banks in Estonia have access to liquidity loans and deposit facilities under the agreed Eurosystem terms.

Low interest rates make it harder for Eesti Pank to earn income from its reserves. Eesti Pank has reacted to changes in the operating environment and has spread its risks by adding further asset classes to the investment portfolio. The aim of long-term investment activity by the central bank is to make sure that enough income is earned from investment and from monetary operations that it would improve the capitalisation of Eesti Pank and so its capacity to bear any losses that could arise from risk scenarios being realised. The more distant goal is to bring the capitalisation of Eesti Pank into line with the average of the central banks in the Eurosystem.

Eesti Pank backs up the functioning of the financial system as a whole. Responsibility for micro level supervision of banks in the euro area lies with the national supervisory authorities working together with the European Central Bank. Eesti Pank is responsible for macro prudential supervision, for analysing and assessing the risks to the Estonian financial sector as a whole, and for applying requirements at the necessary level for the capital and lending of the commercial banks. Eesti Pank has developed a macroprudential framework and set capital requirements and requirements for issuing housing loans in order to reduce the risks of the banks. To analyse better the risks to financial stability, the central bank continues to focus closely on improving its own analytical capacity.

When assessing risks, Eesti Pank considers the connection between the Estonian financial sector and the banking markets in the Baltic states and Nordic countries, and the increased role of financial intermediation by financing institutions outside of the banking sector. Estonia is very exposed to any risks coming from the Nordic banking sector. Alongside its work to prevent financial crises, Eesti Pank also works jointly with the other central banks and resolution authorities in Estonia and the other Baltic and Nordic countries to improve the readiness to react in the event of a crisis. The establishment in Estonia of the head offices of Luminor bank, which operates in Latvia and Lithuania through branches, has made the ability to see risks in the financial sectors of the other two Baltic states much more important than ever before.

Eesti Pank needs to make sure that participants in financial markets are able to comply with ever stricter requirements to combat money laundering and terrorist financing, and that money of suspicious origin does not move through the Estonian financial system.

The role of the central bank as overseer of payments has increased. The focus of attention has been drawn to fast and convenient payment systems that are being developed by banks and technology companies. Eesti Pank supports the development of the payments market by participating in designing the legal framework for it, and by working with various parties. These include state institutions and various associations, as well as other central banks and settlement houses and pan-European institutions.

Together with the other central banks of the euro area and the European Central Bank, Eesti Pank issues the notes and coins of the legal tender of the euro area. Eesti Pank makes sure that demand for euro banknotes and coins is met and sufficient cash reserves are maintained, and that cash is of the appropriate quality and protected against forgery. Access to cash has been improved by making it possible for people to withdraw it from the cash tills of shops.

Payment systems are a central part of the financing infrastructure of the economy. Eesti Pank operates the TARGET2-Eesti settlement system, which is a technical platform for executing monetary policy and which is used for fast and secure transfers of funds between banks. Eesti Pank is also involved in the operation of the security settlement platform TARGET2-Securities and has administered the instant payment platform TIPS (TARGET Instant Payment Settlement) jointly with other central banks of the euro area since 2018.

Eesti Pank is responsible for compiling the statistics for the Estonian financial and external sectors and for the financial account. As a compiler of national statistics, the central bank supplies good quality, reliable, up to date and impartial information that is used in analysis, forecasting and policy setting, and is released publicly. Eesti Pank also helps compile statistics for the European economic and monetary union and works in developing the statistical methodology.

Eesti Pank’s key development tasks 2020-2024


1. Goal

Eesti Pank is a trusted adviser on economic issues for the government and the public, and focuses on topics that are important for price stability and financial stability and for the long-term development of the Estonian economy.


Successfully executing policies designed to achieve price stability and financial stability requires a thorough understanding of what is happening in the financial sector and in the macroeconomy. Under the Eesti Pank Act, Eesti Pank advises the government on monetary policy issues and the government does not take any important economic policy decisions without first listening to Eesti Pank’s opinion. As Eesti Pank analyses and forecasts the Estonian economy and financial sector and also the economies of Estonia’s main trading partners, the bank has sufficient knowledge to be able to advise the government. This knowledge is also required for active and effective participation in the work of the Eurosystem. Experience gained from economic policy debates at the European level helps Eesti Pank contribute better to discussions about the Estonian economy. When advising the government and the broader public on economic matters and sharing information with them, it is important to foresee which economic policy topics may become more important in the future so that the attention of political leaders and the public can be drawn to them. Eesti Pank is also an advisor to the Fiscal Council.

The set of economic policy topics that are handled in depth and on which the government can be advised should be clearly and precisely limited. Eesti Pank should speak not only on questions of price stability and financial stability, but also on the competitiveness of the Estonian economy and topics that affect its long-term growth and on which Eesti Pank is sufficiently knowledgeable, and that relate to the core issues of the bank. For this reason Eesti Pank does not engage in day-to-day political debates, as this could sow doubts about the reliability and independence of Eesti Pank. All the specific economic policy recommendations and conclusions of the central bank must always be based on proper analysis, and should be clearly and understandably presented.

Eesti Pank provides a range of statistics to the public, including information on the financial sector, though the data provided by Eesti Pank do not yet cover the financial sector in sufficient detail. To improve the quality of analysis of the financial sector, the statistics for the financial sector need to be expanded.

Expected results

  1. Eesti Pank is an active and effective participant in economic policy debates on topics that come under the mandate of the central bank, and itself also raises topics that are new and important.
  2. The positions and opinions of Eesti Pank are trustworthy, clearly worded and well-focused. Our advice is listened to.
  3. Eesti Pank is the most highly regarded authority in Estonia on questions of the macroeconomy and the financial sector at the macro level.
  4. Eesti Pank publishes more detailed statistics on the whole of the financial sector.

Actions and resources

  1. We will regularly assess the topics on which Eesti Pank is able to speak. We will create new opportunities for meaningful debates in order to ensure that Eesti Pank’s recommendations are well founded and as useful as possible for policy-makers.
  2. We will provide a platform in economic policy discussions for foreign experts by organising seminars and discussions on topics where the central bank is not the most knowledgeable expert.
  3. When producing our analyses we will focus more attention on our goals and on the clarity of our message. When giving advice we will consider the knowledge and the needs of those to whom the advice is addressed. Where necessary we will help to carry out what we advise, as far as this is in line with the skills and abilities of Eesti Pank.
  4. We will release the new statistics on the financial sector gradually, in line with the priorities of the new statistical work.
  5. We will focus more attention than before on advising the government in various working groups, commissions, advisory councils and similar.

2. Goal

Eesti Pank helps society to understand changes in the financial sector and financial services and the new opportunities and risks that they bring, and where necessary takes steps to reduce risks.


The Estonian financial sector has changed substantially in recent years. Several participants have left the banking market having suffered fatal shortcomings in serving non-resident clients at high risk of money laundering. This has made the banking market less competitive. Much closer attention than before has been focused by banks, financial supervisors and other institutions on preventing money laundering, and this has affected the business models of the banks. Eesti Pank stands ready to help prevent money laundering and assist supervisory authorities concerned with it by collecting more data than before on the payments that pass through banks.

The role of Eesti Pank in maintaining financial stability has been directly affected by the establishment of the Luminor banking group in Estonia. As the operation of Luminor in Latvia and Lithuania is organised through branches of the parent bank, the financial results and risks of Luminor in Estonia are directly affected by developments in the other Baltic states. For the central bank this means that more attention than before needs to be paid to the risks of the Latvian and Lithuanian banking sectors, and that macroprudential decisions need to be coordinated with colleagues in the other Baltic states. The very rapid growth in the business volumes of small local banks relative to those of the large banks that dominate the market is of particular note in banking in Estonia.

Changes in the Estonian financial sector such as the establishment of Luminor or the increase in the market share of small banks may substantially increase demand for ordinary monetary policy loans. If the banks want to use loans they have issued as collateral, it will create a large amount of work for Eesti Pank.

The use of new technology for providing financial services affects both banks and other service providers. The biggest changes are expected to come in settlements, as faster and more convenient payment solutions are offered more and more to clients. This has been made possible by the central banks, for example the TIPS payment platform in the euro area, and by changes in the regulations. The entry into force of the European Union’s new payment directive in autumn 2019 makes it possible to offer even more convenient financial services, but third party access to account information could also bring new risks.

Expected results

  1. Eesti Pank has a full picture of all the new opportunities in the financial sector and the risks that accompany them.
  2. Eesti Pank has found ways to support the state institutions responsible for anti-money laundering work by collecting data on international payments.
  3. Eesti Pank has worked with the Ministry of Finance and Finantsinspektsioon to design the legal environment for Estonia such that sufficient attention is paid to risks while strong competition in the financial sector is also ensured.

Actions and resources

  1. We will regularly assess the new opportunities for clients and the Estonian economy that have arisen from changes in the financial sector, being aware of new risks that could threaten financial stability. We will strengthen the pan-Baltic picture of financial stability in risk assessment.
  2. We will help compile the national risk assessment for money laundering. We will work with Finantsinspektsioon, the Financial Intelligence Unit and other authorities to find ways of using data on bank payments more efficiently in combating money laundering.
  3. We will work together on topics such as payment schemes and standards with the state and state institutions, and various associations, other central banks and settlement houses, and pan-European institutions. Where necessary we will assess the possible impact on the functioning of the Estonian financial sector and on financial stability of business models based on alternative technology.
  4. We will work together with the Ministry of Finance and Finantsinspektsioon to create an appropriate legal environment for financial innovation, focusing on strengthening competition in the financial sector.
  5. We will increase the capitalisation of Eesti Pank to bring it close to the average level of the central banks in the Eurosystem.
  6. Eesti Pank will participate together with TARGET2 members in the T2 and T2S consolidation project of the ESCB, which will substantially change the technical accessibility of T2 and T2S services and affect the current business processes.
  7. We will help develop collateral management, contributing to the creation of the European collateral management system (ECMS), which will allow transactions with eligible collateral to be managed wherever the transaction partner is located in the euro area.

3. Goal

Eesti Pank is ready to carry out its duties in the event of a crisis and to ensure the sufficient functioning of payments and cash circulation in an emergency.


It has become more necessary to focus on the ability of Eesti Pank and other financial market participants to carry out their core duties in the event of various crises. Cyber attacks have become more frequent and require critical systems to be made more resilient. To ensure the uninterrupted operation of payment services it is important to apply security measures limiting cyber risks in all of the information systems providing critical services. It is Eesti Pank’s job as supervisor to assess the resilience of financial market infrastructure to cyber attack. The Eurosystem as supervisor has developed a strategy for cyber resilience to reduce the cyber risks to financial market infrastructure.

In the event of a banking crisis, Eesti Pank must be ready to provide extraordinary liquidity support for banks suffering liquidity problems. Procedures have been defined to achieve this that have also been tested in crisis simulation exercises. The readiness of Eesti Pank to provide liquidity needs to be monitored regularly and the associated procedures must be kept up to date.

The Emergency Act requires that Eesti Pank ensure that interbank payments operate even if the TARGET2 platform that is normally used is not functioning. Eesti Pank should also be ready to meet an unplanned increase in the demand for cash for settlements in the event of a crisis, and must support the supply of cash to the public. In ensuring cash services we must consider what is happening in the market, including the decline in the share of purchases made in cash, the updated business models of banks for providing cash services, and changes in the cash transport market. The initial plans to achieve this have been drawn up with the banks, but the actual capacity to provide vital services under any circumstances still needs to be tested and developed.

Eesti Pank’s ability to fulfil other critical roles of the central bank in an emergency also need to be assessed more thoroughly than they have been so far, including work with other central banks in the euro area and what to do if everyday work in the buildings of Eesti Pank is restricted.

Expected results

  1. Eesti Pank is ready to react in various emergency situations and to ensure the uninterrupted functioning of critical processes.
  2. Eesti Pank is able to ensure liquidity support to the banks, the functioning of critical payments, and the supply of cash in the country even in an emergency.
  3. Eesti Pank as overseer has assessed how the card payment systems and systems overseen by other central banks meet the cyber resilience strategy of the Eurosystem.
  4. Eesti Pank works on cyber security with state institutions and companies from the financial sector and where necessary coordinates their operations to manage cyber risk.

Actions and resources

  1. Procedures and storage solutions will be set up and tested with the commercial banks and cash transporters so that cash services can be provided in an emergency.
  2. Procedures and storage solutions will be set up and tested with the commercial banks so that critical payments will function in an emergency.
  3. Eesti Pank will assess the resilience of the Estonian card payment system to cyber attack.
  4. The succession plans that have been updated and tested will ensure that Eesti Pank is able to carry out its core functions in an emergency including in an alternative location.
  5. The procedures for providing extraordinary liquidity assistance will be updated and tested.

4. Goal

Eesti Pank makes sure of the security of its information systems in providing services even during a cyber attack.


Cyber attacks against companies and state institutions have become more complex and harder to identify. To be able to cope well with the changing dangers, Eesti Pank has drawn up an action plan for improving cyber security. There has not yet been any incident that has threatened the IT systems of Eesti Pank and we want to ensure that this remains the case in the future.

It is of prime importance for Eesti Pank to ensure the security of the central bank’s information systems, as preserving the assets and data of the bank and its ability to do its work depend on this. Security uses a risk-based approach that builds on the best internationally recognised standards and practices. Effective work is done jointly and closely together with other members of the Eurosystem and other parties to ensure that an equally high level of security is maintained throughout the Eurosystem.

Expected results

  1. Eesti Pank meets the definition of the European Central Bank’s Cyber Resilience Oversight Expectation (CROE) model for assessing the cyber resilience of financial institutions at the ‘advancing’ level.

Actions and resources

  1. By analysing future events and risks we will ensure our capacity to react rapidly to new cyber threats.
  2. We will provide our employees with constant opportunities to improve and assess their knowledge of security. Developing the knowledge and skills of users is an important underpinning for security.
  3. We will test the cyber resilience of the bank with regular attack tests. This requires the internal capacity for testing to be developed, but outside testers can also be used.
  4. We will work with members of the ESCB to develop and install the distributed ICT security service.

5. Goal

Eesti Pank has an attitude of openness and is an efficient, developing and harmonious organisation in the management of its work. We achieve ever better results in our work, promoting cooperation within the bank, using external partners where necessary, and applying all the opportunities offered by technology.


Eesti Pank has taken on several new tasks in recent years. At the same time, knowledge, skills and technological resources have all improved, allowing us to do our work better and more efficiently. We have many experts with long experience in central banking, whose knowledge can be used to achieve a range of goals. Employees are motivated by the chance to work in different areas. It is important for Eesti Pank that the experts working here are dedicated and interested in developing their own areas.

Changes in the Estonian labour market test the organisation of work at Eesti Pank and the capacity to hire and hold on to staff of the appropriate level. We must meet the expectations for contemporary flexible working choices and offer our employees working conditions that motivate them, including the chance to rotate between different positions and to gain experience of different areas of the central bank’s work during their career. In paying the employees of Eesti Pank we use a comparison with the median pay of comparison groups in the financial sector working in Harjumaa.

Eesti Pank cares for the welfare, work-life balance, health and working environment of its employees. We pay attention to the environmental impact of the organisation and work to reduce it.

Although it is not the core aim of Eesti Pank to earn a profit, it is important to ensure the financial independence of the central bank. This requires us to be efficient enough to ensure our capacity to earn revenue without taking excessive risks. This is a guarantee of the reliability and the independence of the central bank.

Expected results

  1. The staff of Eesti Pank are skilled, dedicated, and satisfied with their employer and their work.
  2. Eesti Pank is able to carry out all of its tasks ever more efficiently in terms of cost and working hours. This allows us to set new goals and to offer additional value to society.
  3. A division or allocation of strategic investment assets in line with risk tolerance has been approved by Eesti Pank, that takes account of the risks on the central bank’s balance sheet that are independent of investment activity.

Actions and resources

  1. In changing the organisation of work we will start from the goal of keeping similar tasks within the same structural unit as far as possible. This will give staff additional opportunities to do different work, rotate, and create new synergies within the organisation.
  2. In response to the development needs of the bank and staff we will promote staff rotation and mobility within the ESCB, international organisations, the Estonian public sector, and the bank itself.
  3. We will encourage employees to contribute to the development of Estonia outside the central bank as well, through discussions, presentations, contributions to events, and other forms of cooperation, to explain more widely the role and the nature of Eesti Pank, and to make maximum use of the knowledge and skills of Eesti Pank.
  4. To support the further learning of employees within their field, we will plan a budget for training each year that allows staff to have at least five days of training a year.
  5. To improve the organisation of work we will deploy contemporary ICT solutions and remote working options, within the limits of the security requirements of the central bank.
  6. One of the biggest IT projects we will launch in the years ahead will be the development of an integrated data processing system that will allow the constantly increasing demands for statistics to be handled.
  7. We will use new technological opportunities to develop the investment activities of Eesti Pank. In taking investment decisions we will focus more attention on the risks associated with monetary policy.