The Supervisory Board of Eesti Pank plans to transfer up to a quarter of its profit into the state budget
At the regular meeting of the Supervisory Board of Eesti Pank this week, the board confirmed the usual strategy for profit distribution, whereby the central bank gives the state between 0 and 25% of its profit from the previous year.
The Executive Board also informed the Supervisory Board about the initial estimates of the impact on the Estonian economy and banking of Russia’s invasion of Ukraine. “The economic risks to Estonia have been mapped and are bearable. The Board rates highly the ability of Eesti Pank to react to the crisis, as the central bank has rapidly assessed the risks to the Estonian economy and financial sector and has shared its assessment of the situation with the government, state institutions and the public”, said Chair of the Supervisory Board Mart Laar.
The Supervisory Board decided for the profit distribution strategy 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. 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.
The Supervisory Board will start to discuss the distribution of Eesti Pank’s profit for 2021 at the next meeting on 5 April.
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