The countercyclical capital buffer is intended to protect the banking sector against losses that could be caused by cyclical systemic risks. Countercyclical capital buffer requirement requires banks to add capital at times when credit is growing rapidly so that the buffer can be reduced when the... 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


Banks that have adopted the Internal Ratings Based (IRB) approach must use a risk weight of at least 15% for retail exposures secured by real estate to residents of Estonia when calculating risk-weighted assets. The floor is set for the average of the portfolio of retail exposures secured by... 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


Macroprudential policy covers systemic risk analysis and assessment, and the deployment of measures to ensure financial stability. The macroprudential authority in Estonia is Eesti Pank. Under the Eesti Pank Act, the duties of Eesti Pank include supporting the stability of the financial system... more


The systemic risk buffer is intended to increase the resilience of the financial sector to non-cyclical risks that could have a serious negative impact on the national financial system or the real economy.

From 1 August 2016 all banks and banking groups are required to hold a systemic... more

  • Overall the risks to financial stability are small. The risks are mitigated by the rising incomes that follow from economic growth, large financial buffers and the strong capitalisation of the banks
  • The biggest danger to Estonian financial stability comes from the risks in the... more
  • The newly created bank will increase the volume of assets in the Estonian banking sector by around 40%
  • The new bank will be the second biggest in the Baltic states
  • The new bank could strengthen competition in the market for banking services for private clients in Estonia... more
  • From August the commercial banks will have to hold systemic risk buffers of 1% rather than 2%
  • Eesti Pank will require Swedbank and SEB to hold a further buffer of 2% because they are systemically important banks

Changes to the capital buffer requirements for the... more

Working Papers of Eesti Pank 7/2015 This paper investigates the effect of a macroprudential policy instrument, caps on banks’ leverage, on domestic credit to the private sector since the Global Financial Crisis. Applying a difference-in-differences approach to a panel of 69 advanced... more
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