The Supervisory Board has defined the post-employment cooling off period for the departing Governor
At its regular meeting on Tuesday, the Supervisory Board of Eesti Pank set the cooling off period for Governor Ardo Hansson, which will be for one year after his term of office ends. The Supervisory Board decided that Mr Hansson will receive monthly compensation for the restrictions of 80% of his salary.
Ardo Hansson’s salary is 10,200 euros a month and the compensation will be taxed in the same way as a salary. During the cooling off period he is not permitted to take a job at a commercial bank or at a transaction partner of the central bank. This restriction is intended to prevent conflicts of interest arising, as the departing central bank governor has market-sensitive information on the Estonian and European financial sectors and on the monetary policy of the European Central Bank.
The rules of the European Central Bank set a cooling off period for members of its Governing Council to guard against conflicts of interest. Under Estonian law a cooling off period can only be set if the person subject to it is paid compensation for the duration of it.
If the former central bank governor should break the restrictions during the cooling off period, the bank may demand a penalty of the same amount as the cooling off period compensation. The Supervisory Board has the right to reduce the penalty depending on the circumstances. If the former governor takes a job at Eesti Pank, the compensation is reduced so that the salary from the bank and the compensation together do not exceed the original compensation.
The Eesti Pank Supervisory Board also decided to pay Ardo Hansson a bonus for long-term good service of 25,000 euros.
The Supervisory Board heard a review of the large-scale Nordic Baltic financial crisis simulation in January and its conclusions. Eesti Pank Governor Ardo Hansson gave board members the regular review of the state of the economy in the euro area and the board decided to add to the work plan for the year of the internal audit.
Before the Supervisory Board met there was a meeting of the Fiscal Council, which gave a review of its initial opinion of the new state budget strategy. The Supervisory Board of Eesti Pank declared its support for the work of the Fiscal Council and its dissatisfaction that the materials submitted by the government for the council to prepare its opinion were insufficient.
The next meeting of the Eesti Pank Supervisory Board will be on 11 June.