The Supervisory Board of Eesti Pank is to continue the current strategy of profit distribution
At the regular meeting of the Supervisory Board of Eesti Pank on Tuesday, the board confirmed the current strategy for profit distribution, whereby the central bank gives the state between 0 and 25% of its profit from the previous year.
The Supervisory Board will start to discuss the distribution of Eesti Pank’s profit for 2016 at the next meeting on 28 March.
The Supervisory Board decided that the relative level of Eesti Pank’s capital should increase to the average level of the central banks of the euro area, as the balance of risks to the capital of the Eurosystem as a whole is considered when joint monetary policy decisions are made. This means it is necessary to raise the level of capital by about half a billion euros to 1.4 billion.
The ratio of Eesti Pank’s increased capital to the risk assets used for monetary policy is one of the lowest of any of the central banks of the euro area.
Since 1992 Eesti Pank has allocated a total of 141 million euros to the state budget.
The Supervisory Board held the second reading of its section of the Eesti Pank annual report for 2016 and the first reading of the whole report. Members also heard a review of how the plan of work and the budget were fulfilled last year, and heard the regular review by Governor Ardo Hansson of the state of the economy in the euro area.
The next meeting of the Eesti Pank Supervisory Board will be on 28 March.