CHRONICLE OF MONETARY POLICY. JULY-AUGUST 1995

July 4

Decision of the Board of Eesti Pank (Bank of Estonia)

On the Appointment of the Vice-President of Eesti Pank

In accordance with Clause 2.4, Article 9 of the Law of the Central Bank of the Republic of Estonia, the Board of Eesti Pank decided to appoint Heldur Meerits to the post of Vice-President and member of the Executive Management as of September 4.

July 6

Decree of Eesti Pank

On Amendments in the Decree on Testing the Prudential Ratios of Banks

The new Decree extends the testing period of the instructions on meeting the prudential ratios and reporting procedures to September 30, 1995. The period from October 1 to December 31 was declared a transition period to using the reporting forms on prudential ratios as established in the appendix to Eesti Pank's decree of April 21.

During the test period all credit institutions are obliged to submit a report on prudential ratios to Eesti Pank, using both the old 1992 forms and the new forms.

August 7

Decree of Eesti Pank

On Selling Eesti Pank's Shares in Põhja-Eesti Pank (North-Estonian Bank)

In order to reduce the participation of Eesti Pank in the share capital of Estonian credit institutions it was decided to sell the shares of Põhja-Eesti Pank owned by Eesti Pank to credit institutions of the Republic of Estonia through a limited tender with preliminary negotiations.

The bidder has to submit a plan for the further development of the bank, have sufficient capital for the stable operation and development of both banks, and if necessary, funds for investments in order to meet the existing prudential ratios. The bidder has to guarantee the interests of the depositors and be able to participate in the reconstruction of the bank and supporting its development as an institution.

Eesti Pank reserves itself the right not to sell shares to credit institutions whose bid and guarantees it regards insufficient.

A commission was set up under the Regulations of Eesti Pank of August 18 and 23, to select the best offer; the commission is headed by Enn Teimann, Vice-President of Eesti Pank.

August 30

Decree of Eesti Pank

On the Reserve Requirement of Eesti Hoiupank (Estonian Savings Bank)

In view of the unification of banking requirements, it was decided to change the requirements set by Eesti Pank on March 31, 1994, for investing demand deposits of private clients of Eesti Hoiupank.

The share of funds made up of private clients' deposits deposited in Eesti Pank and/or invested in treasury bills of the Estonian Government will be reduced from the obligatory 50% to zero by December 15, 1995. The reduction will start gradually from September 1, at a rate of 10%.

Decree of Eesti Pank

On Giving a License to Postipankki OY for Opening a Representative Office in Tallinn

Proceeding from the Law on Credit Institutions and procedures for establishing a subsidiary or branch of a foreign credit institution and giving a license to it, Eesti Pank issued a license to Finnish Postipankki OY for opening a representative office in Tallinn.