The Supervisory Board of Eesti Pank plans to continue transferring up to a quarter of its profit into the state budget
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 2019 at the next meeting on 7 April.
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. As at the end of 2019, this means the level of capital needs to be raised by around 590 million euros to 1.8 billion euros.
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 153.3 million euros to the state budget.
The meeting of the Supervisory Board was preceded by a joint seminar with Finantsinspektsioon to discuss how accessible the banking system is to businesses.
The Supervisory Board held the first reading of the Eesti Pank annual report for 2019 and of the reviews of the activities of the Supervisory Board and the Executive Board. Governor Madis Müller gave his regular review of the economy in the euro area and the members of the Supervisory Board were told about the principles for investing the financial assets of Eesti Pank, and they met the head of the internal audit Henn Oit.
The next meeting of the Eesti Pank Supervisory Board will be on 7 April.
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