Macroprudential policy tools
The macroprudential tools available to Eesti Pank can be divided into three groups:
1) Moral suasion measures, with which Eesti Pank can draw the attention of market participants to vulnerabilities in the financial system and so influence their decisions indirectly. This can include advice to market participants, but also covers the analysis and risk assessments in the Financial Stability Review, public presentations and press releases. Eesti Pank can also give its opinions and recommendations on measures that fall within the remit of other institutions.
2) Instruments set out in the European Union’s Capital Requirements Regulation and Directive, where the principles for implementation and coordination have been harmonised in the European Union. These include capital buffer requirements such as systemic risk buffers, countercyclical capital buffers, and systemically important institution buffers, and also the measures under Article 458 of Regulation (EU) No 575/2013.
3) Requirements for issuing loans, which derive their legal basis from the Credit Institutions Act. Eesti Pank has the right to set limits on the loan-to-value ratio, the loan-to-income ratio, the debt service-to-income ratio and the maximum maturity of loans, and on the loan-to-deposit ratio of credit institutions.
Eesti Pank generally assesses the need to introduce or change macroprudential measures twice a year and publishes the results in the Financial Stability Review.
Systemic risk buffer
1 May 2020
Other systemically important institutions buffer
1 August 2016
AS SEB Pank
1 August 2016
Luminor Bank AS
|2%||1 July 2018|
AS LHV Pank
1 January 2019
1 January 2016
Risk weight floor for mortgage loans*
30 September 2019
Limits for mortgages**
1 March 2015
debt service-to-income (DSTI)
** The floor is set for the average risk weight of the mortgage portfolio of credit institutions that use the Internal Ratings Based Approach.
- Eesti Pank has updated the principles for defining banks as systemically important (20.11.2020)
- Eesti Pank is cutting the capital buffer requirements for the banks by 110 million euros (25.03.2020)
- Eesti Pank sets a risk floor for mortgage loans (29.08.2019)
- The central bank requires additional capital buffers from two banks (17.04.2018)
- Eesti Pank will require Swedbank and SEB to hold additional buffers from August (31.05.2016)
- Eesti Pank introduced a capital buffer requirement for banks that responds to the credit cycle (02.12.2015)
- Eesti Pank has set three requirements for issuing housing loans (04.03.2015)
- Eesti Pank is setting requirements for housing loans from March 2015 (16.12.2014)
- Eesti Pank is planning to set requirements for housing loans (29.10.2014)
- Eesti Pank is to toughen capital requirements for banks from August (20.05.2014)
- Measures taken by Eesti Pank during the period of rapid credit growth (2009)