Eesti Pank’s role in safeguarding financial stability
Financial stability means the smooth functioning of financial intermediation under both normal and unexpectedly adverse circumstances.
Safeguarding the stability of the financial system is one of the key functions of Eesti Pank under the Eesti Pank Act. The central bank oversees the functioning of the financial system as a whole, while individual financial institutions and markets are supervised by the Estonian Financial Supervision Authority.
Eesti Pank safeguards financial stability in three primary ways.
- Through macroprudential supervision by analysing and assessing the risks to financial stability and taking appropriate policy measures;
- By designing policies for the financial sector and participating in preparing the key legal acts regulating the financial sector;
- By securing the safety net for the financial sector.