Eesti Pank, Estonia's central bank, is entrusted with implementing all the measures at its disposal to increase confidence in the Estonian kroon and the stability and integrity of the Estonian monetary system both at home and abroad.


  1. Maintaining and ensuring the value of the Estonian kroon in fulfilling all the functions of money.
  2. Improving the safety and stability of the Estonian banking system.
  3. Furthering the efficiency and development of the Estonian financial system, particularly the payment and settlement systems.
  4. Meeting the cash demand of the public.


Whereas Eesti Pank is guided by its mission, primary goals and Estonia's desire to join the European Economic and Monetary Union;

whereas the susceptibility to macroeconomic instability and external shocks characteristic to economies in transition underline the importance of institutional development;

whereas Eesti Pank considers it prudent to continue to conduct a monetary policy based on a fixed exchange rate and currency board arrangement,

Eesti Pank is guided by the following:

1. The credibility and stability of the kroon is safeguarded by maintaining a monetary policy based on a fixed exchange rate and currency board arrangement.

2. In managing the foreign currency reserves backing the kroon Eesti Pank proceeds from the principles of their preservation, liquidity and maximum profitability, within the risk limits determined by the legislation.

3. The main tools of Eesti Pank in securing the efficiency of the transition mechanism of the rule-based monetary policy in the conditions of rapid economic and financial development are the relevant structure of the operational framework of monetary policy and improved access, first of all, to the information on short-term capital flows and the debt burden of the economy.

4. Without compromising the currency board arrangement, Eesti Pank is ready to use additional instruments of monetary policy in order to minimise the macroeconomic and institutional risk characteristic to economies in transition.

5. Eesti Pank develops monetary policy scenarios in connection with the launch of Stage 3 of the European Economic and Monetary Union (EMU) as well as Estonia's future possible accession to EMU.

6. In order to improve the activities of the public sector, Eesti Pank co-operates actively with the Government of the Republic of Estonia and governmental institutions. Proceeding from the Central Bank Act, Eesti Pank advises the Government on monetary and banking policy issues. In view of the limited resources, Eesti Pank can advise the government also in other fields when needed.

7. In designing and implementing monetary and banking policy, Eesti Pank aims at harmony with the corresponding European Union legislation, allowing only temporary inconsistencies caused by specific features clearly attributed to the transition period.

8. To safeguard the effectiveness of monetary policy and banking supervision, Eesti Pank also pays greater attention to non-bank financial intermediaries in planning and implementing its policies.

9. In view of the growing integration of the financial markets, Eesti Pank supports the establishment of politically unbiased integrated supervision of financial institutions in Estonia, at the same time keeping in mind that the merger of different supervision bodies should not be allowed to damage the quality of supervision even temporarily.

10. Eesti Pank aims at harmonising Estonian supervision standards and practice with the best of international practice and reacts promptly to changes in the environment, enforcing prudential ratios and other regulations stricter than required by international standards but which correspond to higher macro- and microeconomic risks characterising Estonia as an economy in transition and which strengthen the international competitiveness of the financial sector.

11. In safeguarding the stability of the financial sector and dividing responsibility between the private and the public sector, Eesti Pank emphasises self-regulation and strengthening of general management, good banking practices, as well as transparency of activities and assumed risks.

12. Eesti Pank aims at minimising its ownership in the banking sector. In divesting of shareholdings Eesti Pank proceeds from the need to safeguard the stability of the financial system and to maintain a reliable and transparent ownership structure in banking which can be achieved by involving strong strategic investors.

13. In the event of a banking crisis, Eesti Pank strives to prevent the crisis from becoming systemic. In order to safeguard the continuity and trustworthiness of the financial system, Eesti Pank deems it necessary to define a safety net of the financial sector, at the same time paying greater attention to improving market discipline through the responsibility of owners and openness of the financial sector, thus guaranteeing transparent and the cheapest solution of the problems that may arise and minimising the possibility of moral hazard.

14. In view of the globalisation of the financial markets, Estonia's openness to external risks and integration into the international financial markets, Eesti Pank deems important to pay greater attention to international co-operation with the central banks and supervisory bodies of other countries in order to safeguard financial stability in Estonia.

15. In view of the need to make transactions in Estonian kroon more secure, faster and efficient, and to fulfil the requirements and regulations of the European Union, Eesti Pank implements the Real Time Gross Settlement System and improves the Designated Time Net Settlement System.

16. Eesti Pank supports private initiative and a pro-active approach to developing the infrastructure of financial markets. Regarding multilateral netting settlement systems operated outside of the central bank, Eesti Pank supports their greater transparency and a smaller openness to risks.

17. In the light of financial market globalisation and potential comparative advantages of Estonia, Eesti Pank deems important the openness and international competitiveness of the financial sector, with an emphasis on the readiness of the financial sector for possible future membership in the European Economic and Monetary Union.

18. For the purpose of mutually beneficial international co-operation, Eesti Pank is increasingly active in international financial organisations and redoubles the efforts to introduce Estonian experiences in international forums.

19. In compilation, analysis and distribution of statistics, Eesti Pank strives to improve the dissemination of information to economic agents and the conformability of the statistics to the international standards.

20. Eesti Pank introduces additional quality and security measures for cash and its handling in Eesti Pank, credit institutions and cash holding centres. Cash management will be conducted according to the ISO 9000 standard.

21. Eesti Pank follows international practice and takes measures, including regular publications, to improve the transparency of the organisation and make its activities more comprehensible to the general public.

22. To guarantee more sparing and efficient use of resources Eesti Pank improves the methods of strategic planning and budgeting. When possible, Eesti Pank uses quantitative methods and pricing of services in order to achieve better results in operational and support activities and compare its costs with the costs of other central banks. Self-education, in-service training and efficiency of activity are the main methods of improving the core competence and professionalism of Eesti Pank employees.

Adopted by the Board of Eesti Pank on 21 January 1999