Bank of Estonia
Address: Estonia Puiestee 13, Tallinn 15095, Estonia
The Bank of Estonia, also known as Eesti Pank, is the central bank of the Republic of Estonia. It is responsible for implementing monetary policy and ensuring the stability of the Estonian economy. The Bank of Estonia was established on June 24, 1919, and has been operating independently since Estonia regained its independence in 1991.
The mission of the Bank of Estonia is to promote the stability of the Estonian economy and ensure the smooth functioning of the financial system. The Bank seeks to achieve this mission by implementing effective monetary policy, regulating and supervising financial institutions, and providing reliable economic and financial analysis.
The Bank of Estonia was established by an Act of the Estonian Constituent Assembly on June 24, 1919. The current legal framework for the Bank is provided by the Bank of Estonia Act, which was adopted on May 21, 1992. The Act defines the responsibilities of the Bank, including the issuance of currency, regulation and supervision of the financial system, and the management of foreign exchange reserves.
Monetary Policy Aims
The Bank of Estonia is responsible for implementing monetary policy to achieve price stability in the Estonian economy. The Bank's primary objective is to maintain inflation within a range of 2 to 3 percent over the medium term. To achieve this objective, the Bank uses a combination of interest rate policy and open market operations.
Issuance of Currency
The Bank of Estonia is responsible for issuing the national currency, the euro, in Estonia. The Bank ensures that there is an adequate supply of currency to meet the needs of the economy, and it works to maintain the integrity of the currency by preventing counterfeiting.
Banker to the Government
The Bank of Estonia serves as a banker to the Estonian government, managing the government's accounts and providing financial services. The Bank also provides advice to the government on economic and financial matters, and it participates in the management of the government's debt.
Lender of Last Resort
The Bank of Estonia serves as a lender of last resort, providing liquidity support to the banking system in times of crisis. The Bank also has the authority to provide emergency loans to financial institutions to help prevent systemic risk.
Control of Money Supply
The Bank of Estonia has the responsibility for controlling the money supply in the Estonian economy. The Bank uses a variety of tools to achieve this objective, including interest rate policy, reserve requirements, and open market operations.
Control of Counterfeiting
The Bank of Estonia works to prevent counterfeiting of the national currency, the euro. The Bank uses a variety of measures, including the use of advanced security features in banknotes, to prevent counterfeiting.
Regulation and Supervision of Banks
The Bank of Estonia is responsible for regulating and supervising financial institutions operating in Estonia. The Bank's regulatory framework is designed to promote the stability and soundness of the financial system, while also ensuring that financial institutions operate in a safe and sound manner.
Management of Foreign Exchange Reserves
The Bank of Estonia is responsible for managing Estonia's foreign exchange reserves. The Bank's management of foreign exchange reserves is designed to ensure that Estonia has adequate reserves to meet its external obligations and to help maintain the stability of the exchange rate.
Research and Analysis
The Bank of Estonia conducts research and analysis on economic and financial issues affecting Estonia and the broader European Union. The Bank's research and analysis are designed to provide policymakers and the public with reliable information to inform decision-making.
Collection and Dissemination of Statistical Data
The Bank of Estonia collects and disseminates statistical data on a range of economic and financial indicators in Estonia. It provides this data to policymakers, researchers, and the public to promote transparency and inform decision-making.
Oversight of Payment and Settlement Systems
The Bank of Estonia oversees the payment and settlement systems in Estonia. It ensures that these systems operate efficiently and securely, promoting financial stability and facilitating economic activity.
Autonomy from Political Control
The Bank of Estonia operates independently of political influence. Its decisions are made based on sound economic and financial principles and are aimed at promoting the stability and development of the Estonian economy.
The Bank of Estonia plays a critical role in promoting economic stability and development in Estonia. Through its various functions, including monetary policy, regulation and supervision of banks, management of foreign exchange reserves, and oversight of payment and settlement systems, the Bank helps to ensure a stable and prosperous economy for the people of Estonia. Its independence and commitment to sound economic and financial principles make it a trusted and reliable institution both domestically and internationally.
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