The countercyclical capital buffer is intended to protect the banking sector against losses that could be caused by cyclical systemic risks increasing in the economy. Countercyclical capital buffers require banks to hold capital at times when credit is growing rapidly so that the buffer can be... more
The bank deposits of households in Estonia stood at 9.6 billion euros in February. An average of 112 million euros a month have been added to bank deposits over the past 12 months, meaning household deposits have grown by over 16% in a... more
The market for residential real estate has survived the extraordinary times well. Transactions have recovered and the average transaction price has risen. The emergency restrictions in the spring made it harder to complete transactions... more
The macroprudential tools available to Eesti Pank can be divided into three groups:
1) Moral suasion measures, with which Eesti Pank can draw the attention of market participants to vulnerabilities in the financial system and so influence their decisions indirectly. This can include... more
Failures in the financial system may occur unexpectedly and rapidly pass on to other markets and market participants. Financial crises can have great costs for society and so it is important that authorities prepare well for such eventualities.
Crisis management in Eesti Pank is based on... more
The uncertainty that was caused by the coronavirus crisis caused many companies to put new investment on pause in the spring, reducing the need for new long-term loans. The general fall in economic activity at the same time also reduced the... more
As part of its macroprudential framework Eesti Pank defines each year which banks are important for the functioning of the Estonian financial system and decides how big the additional capital buffers should be that those banks must hold. Eesti Pank this year updated its principles for defining... more
The aim of the other systemically important institutions buffer is to increase the resilience of systemically important market participants. Their importance may stem from their size, their complexity or their interdependence with other participants in the financial system.
In 2018 Eesti... more
The Financial Stability Review from Eesti Pank finds that the large capital buffers and good profitability of the banking sector will allow it to cope with the loan losses that may build up during the crisis and have money available to lend to businesses and households.
“The banking... more