Meeting of the Supervisory Board of Eesti Pank
On Wednesday, December 15, the Supervisory Board of Eesti Pank had a regular meeting, where they discussed the central bank's profit distribution strategy and decided to allocate to the state budget 706 million kroons of its 1.247 billion kroon profit posted in 2008.
The Supervisory Board did not amend the current profit distribution strategy, which aims to shape the balance sheet of the central bank so that it would ensure an efficient and reliable currency board environment to maintain the stability of the kroon. The strategy proceeds from the principle of keeping the level of Eesti Pank's excess reserve above the currency board above 2% of GDP and over 5% as a ratio to M2 until the adoption of the euro. Thus the strategy allows to transfer up to a quarter of the central bank's profit to the state budget.
The Supervisory Board of Eesti Pank decided to make an exception in allocating the central bank's 2008 profit and transfer to the state budget a total of 706 million kroons, i.e., 56.6% of the profit.
"The Supervisory Board proceeded from practical considerations. First of all, the adoption of the euro will help alleviate monetary policy related risks and create additional confidence in monetary policy. Second of all, by contributing to the state budget more extensively than usual, Eesti Pank goes beyond its regular central bank's tasks and provides an additional measure to support Estonia's efforts to adopt the euro as of 2011," said Jaan Männik, Chairman of the Supervisory Board.
The Supervisory Board decided to allocate a share of its profit to the state budget in the amount considered in consolidated budget balance calculation.
In addition, the Supervisory Board was given an overview of the next year's draft budget. Governor of Eesti Pank will approve the budget by the end of 2008 at the latest.
At the last meeting of this year, the Supervisory Board of Eesti Pank also approved the Internal Audit Department's work schedule for 2010.
The next meeting of the Supervisory Board of Eesti Pank will be held on 26 January 2010.