Eesti Pank has continued its cooperation with the International Monetary Fund (IMF) and the Bank for International Settlements (BIS). In 1995 Eesti Pank became a member of the Société Universitaire Européenne de Recherches Financiéres (SUERF). The SUERF is an important forum for exchanging information, introducing research and discussing problems of economy and finance. Eesti Pank participated in the formulation of the European Association Agreement to be signed between the European Communities, their member countries and the Republic of Estonia. Cooperation was also maintained with the International Bank for Reconstruction and Development (IBRD), the European Bank for Reconstruction and Development (EBRD), the Organisation of Economic Cooperation and Development and central banks of other countries.
International Monetary Fund
Estonia became a member of the International Monetary Fund in May 1992. The main functions of the IMF that was founded in 1944, are: the promotion of international monetary cooperation, consulting member countries in economic and financial policy, promotion of trade and by this contribution to the development of member countries, assistance in maintaining the stability of currencies and their exchange rates and providing financial assistance to member countries facing temporary balance of payments difficulties. The Estonian quota in the IMF is SDR 46.5 million which accounts for 0.03% of the general quota and gives Estonia 0.05% of the total votes.
Between 1992 and 1994, Estonia had two cooperation programmes with the IMF through which the SDR 39.5 million Standby Agreement (SBA) and SDR 23.5 million Systemic Transformation Facility (STF) were allocated to Estonia. The SBA is the most extended facility of the IMF designed for balancing the balance of payments. Repurchase of the Standby Agreement takes place in stages. Repurchase starts three and a quarter years after the loan was taken and the time of maturity is 5 years. The first repurchase of the 1992 Standby Agreement was made in 1995. The Standby Agreements are included in the foreign exchange reserves of Eesti Pank.
In February 1995, a new cooperation programme commenced, within the framework of which a Precautionary Standby Arrangement of SDR 13.95 million was granted to Estonia by the IMF. The Precautionary Standby Arrangement is a simplified version of the regular Standby Agreement but in this case the state has no intention of purchasing the amount made available to it.
A significant role in strengthening cooperation with the IMF has been played by the IMF resident representative in Estonia. In May 1995, for the first time Estonia got its own page in the international monthly issue of International Financial Statistics. The monthly publishes main statistical data of 151 countries. Estonia was the sixth country among the Central and East European countries whose data were included in the International Financial Statistics.
Bank for International Settlements
The Bank for International Settlements (BIS) is one of the oldest forums for cooperation between central banks. Eesti Pank was among the founders of the BIS. Eesti Pank regained its 1940 membership in 1992. In conjunction with the internationalisation of capital and financial markets, the role of the BIS as an institution for counselling and coordinating the interests of central banks has grown in recent years. Eesti Pank regularly participates in the BIS expert groups conferences on banking supervision, monetary policy, central bank activities, financial markets and coordination of international cooperation.
Eesti Pank participated in the preparation of the European Agreement together with the Estonian delegation. The Agreement was signed on 12June 1995 in Luxembourg and marked an important step in the path of joining the European Union. Through the European Agreement, Estonia will be the first among the Central and East European countries to become an associate member without a transition period.
The European Agreement stipulates that the credit institutions of Estonia and the European Union have the right to commence their activities in the territory of each other on equal terms with the domestic credit institutions. One of the basic stipulations is free movement of payments, investments and other capital as well as the obligation of Estonia and other countries of the European Union not to impose restrictions in this field now or in the future. The aim of the economic cooperation is to create a framework promoting the development of the sectors providing banking, insurance and financial services. Within the framework of general cooperation, the European Union gives technical assistance to support the aspirations of Estonia in bringing the monetary policy into conformity with the European Monetary System (ERM). Efforts are also made to impede the usage of financial systems for the investment of monies received from criminal activities into legal business or investments. For the Estonian integration into the European Union, it is important that the Estonian legislation coincide with that of the European Union.
The European Agreement will come into effect after its ratification by the parliaments of all the EU countries.
Central Banks of Other Countries
In 1995 Eesti Pank continued the cooperation and exchange of information with the central banks of other countries. The contact with representatives of the central banks belonging to the same IMF constituency as Estonia (Nordic-Baltic Constituency), i.e., Finland, Sweden, Norway, Iceland and Denmark was especially close. Consultants from the central banks of Nordic countries gave expert advice on banking supervision, clearing systems and financial markets.
With regard to routine work a lot of attention was paid to getting to know the experience of other reforming countries. In June 1995, the Second Seminar of Central Banks of the Baltic Countries took place in Latvia where the issues of monetary policy, banking supervision and management of foreign currency reserves were discussed by three working groups. For the moment, the seminar is the main forum for the exchange of information and introduction of standpoints between the central banks of the Baltic countries.
Between 1992 and 1995, 51 employees of Eesti Pank have participated in the training courses organised and financed by the IMF, 10 of them in Washington, the rest either in the training centre of the Joint Vienna Institute or in different regional courses organised by the IMF. The main subjects have been banking supervision, balance of payments methodology, accounting, settlements, statistics, monetary policy and financial analysis.
16 people from Eesti Pank participated in the training courses organised by the BIS between 1993 and 1995, the majority of them in the courses on banking supervision and legislation.
Cooperation with other central banks in the field of training has also been many-sided. Between 1992 and 1995, Eesti Pank officers visited 10 central banks and their training centres with the aim of getting acquainted with the work of their corresponding departments. 47 people from Eesti Pank visited Suomen Pankki (Bank of Finland) and 15 Sveriges Riksbank (the central bank of Sweden). 19 people studied in the Centre for Central Banking Studies of the Bank of England, 30 people in the Austrian Bankers' College of the Oesterreichische Zentralbank (the central bank of Austria), 8 in the Gerzensee Studienzentrum of the central bank of Switzerland, 6 in the Deutsche Bundesbank, 7 in the Denmarks Nationalbank and 4 people in the Banca d'ltalia.