The Eesti Pank budget will increase by 3.4% next year
The budget of Eesti Pank for 2021 will be 24.2 million euros. Without cash handling costs, which vary a lot from year to year, the budget will be 0.7 million euros, or 3.4%, larger than in 2020.
Including cash handling costs makes the central bank budget 4.4% bigger next year than it was this year. The costs of producing circulating coins and collector coins will increase in 2021. It is planned that stocks of one, five and ten-cent coins will be increased, and the central bank will also produce four collector coins and three two-euro circulating coins with special designs. Eesti Pank will also order additional 20-euro banknotes.
Key points in the budget of the central bank for 2021 will be research and cooperation projects to analyse the creation of digital currency, analysis of green investment, cyber security, and ensuring financial stability in a changing environment. Eesti Pank will order an energy audit of its buildings next year and will continue to change its room planning, partly because the number of staff at Finantsinspektsioon is increasing. Projects that were put on pause because of the crisis and will be restarted next year are the development work for the TARGET2-Eesti settlement system for large payments and the TARGET2-Securities settlement platform for securities, and consultations on developing the information system for statistics.
Eesti Pank’s forecasts show that the revenues for next year for the central bank will be 14.2 million euros, which is 27.6 million euros less than was forecast for 2020. The largest share of Eesti Pank’s income earlier came from income related to the single monetary policy of the euro area, but the pandemic crisis has caused a substantial reduction in the forecast for those revenues. The bank also expects to gain income from managing the reserves, providing support services to Finantsinspektsioon, and selling collector coins. The bank is expected to make a profit of 9.9 million euros in 2021.
“The monetary policy decisions taken by the central banks of the euro area during the crisis impact the revenues of the central banks directly. The cost of the steps taken to keep the loan conditions for businesses and people as favourable as possible has been a sharp drop in the revenues of the central bank. These were conscious decisions taken to ease the impact of the crisis and to help the economy to recover. The impact of these steps on the revenues of the central bank will be temporary. It is to prepare for just such difficult times that the central bank has built up additional reserves and Eesti Pank now has as much as 600 million euros in capital”, said Governor of Eesti Pank Madis Müller.
Eesti Pank will have positions for 233.6 people next year, which is 2.5 more than this year. The staff costs will rise by 5.3% over the year to 11.9 million euros, with part of that rise coming from the increase in the number of people employed. Eesti Pank aims to keep the salaries of its employees at roughly the same level as those for similar positions in the financial sector in Tallinn, which is where the central bank mainly competes for employees.
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