Eesti Pank Annual Report 2009
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Eesti Pank Bank of Estonia Eesti Pank Annual Report 2009 2010 © Eesti Pank, 2010 Address Estonia pst 13 15095 Tallinn Estonia Phone +372 6680 719 Fax +372 6680 836 E-mail [email protected] Website www.bankofestonia.ee Subscriptions for publications of Eesti Pank Phone: +372 6680 998 Fax: +372 6680 954 E-mail: [email protected] ISSN 1406-1414 Executive editor: Kadri Põdra Design: Vincent OÜ Layout: Urmas Raidma Printed in Folger Art 2 CONTENTS MAIN FEATURES AND FUNCTIONS OF EESTI PANK ..................................................................... 9 FOREWORD BY GOVERNOR OF EESTI PANK .............................................................................. 11 ACCOUNTABILITY .......................................................................................................................... 16 Legal framework for accountability and compulsory publications of the central bank ................. 16 Accountability vis-à-vis the Riigikogu ........................................................................................ 16 Regular reporting on economic policy views and publication of economic data ......................... 17 STRATEGIC OBJECTIVES FOR PERFORMING THE MAIN FUNCTIONS OF EESTI PANK ......... 20 THE FUTURE ROLE OF EESTI PANK AS A MEMBER OF THE EURO AREA .............................. 24 Monetary policy and economic analysis ..................................................................................... 24 Reserve management and foreign currency operations ............................................................. 25 Cash and payment and settlement systems ............................................................................... 26 Statistics .................................................................................................................................. 26 Assets and liabilities of the central bank after the changeover ................................................... 27 MAJOR ACTIVITIES AND ACHIEVEMENTS OF EESTI PANK IN 2009 MONETARY POLICY .......................................................................................................................... 30 Economic analysis, forecast and research ..................................................................................... 30 Monitoring ................................................................................................................................. 30 Economic reviews ..................................................................................................................... 31 Economic forecast .................................................................................................................... 31 Economic research.................................................................................................................... 31 RESERVE MANAGEMENT ................................................................................................................. 33 Structure of foreign exchange reserves ..................................................................................... 33 Investment process .................................................................................................................. 33 Results and determinants of investment in 2009 ........................................................................ 34 Changes in the benchmark portfolio in 2009 .............................................................................. 34 Asset management services provided to the public sector ......................................................... 34 ENSURING FINANCIAL STABILITY ..................................................................................................... 38 Financial sector analysis and financial stability assessment ........................................................ 38 Measures adopted to ensure financial stability ........................................................................... 39 Changes in the EU financial stability framework .......................................................................... 40 Payment and settlement systems oversight ............................................................................... 43 3 Eesti Pank Annual Report 2009 DEVELOPMENTS IN STATISTICS ....................................................................................................... 44 Banking and other financial statistics ......................................................................................... 44 Balance of payments statistics ................................................................................................. 45 General economic statistics ...................................................................................................... 47 PAYMENT AND SETTLEMENT SYSTEMS .......................................................................................... 48 Development of payment and settlement systems ..................................................................... 48 Settlements ............................................................................................................................... 48 MEETING THE CASH DEMAND ......................................................................................................... 54 Banknotes and coins in circulation ............................................................................................. 54 Expert analysis and handling of cash ......................................................................................... 54 Preparation of new banknotes and coins ................................................................................... 55 COOPERATION ................................................................................................................................. 60 International cooperation ............................................................................................................... 60 Cooperation with European Union institutions ............................................................................ 60 European Systemic Risk Board ................................................................................................. 62 Cooperation with the International Monetary Fund ..................................................................... 64 Cooperation with the Bank for International Settlements ............................................................ 66 Cooperation with rating agencies............................................................................................... 66 Domestic cooperation .................................................................................................................... 66 PUBLIC RELATIONS ...................................................................................................................... 70 Principles of public relations ...................................................................................................... 70 Media relations and public appearances .................................................................................... 70 90th anniversary of Eesti Pank .................................................................................................. 71 Celebration of the historical premises of Eesti Pank .................................................................. 71 Eesti Pank Museum .................................................................................................................. 71 GOVERNANCE, ORGANISATION AND HUMAN RESOURCES POLICY .......................................... 76 Governing and decision-making bodies of Eesti Pank ................................................................ 76 Development of the management system and work organisation of Eesti Pank in 2009 .............. 78 e-Eesti Pank in 2009 ................................................................................................................. 80 Eesti Pank’s human resources policy ......................................................................................... 80 ANNUAL ACCOUNTS OF EESTI PANK FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009 ........................................................... 84 4 ANNEXES GLOBAL ECONOMY IN 2009 .......................................................................................................... 106 United States and Japan ............................................................................................................. 106 Euro area ..................................................................................................................................... 108 ESTONIAN ECONOMY IN 2009 ....................................................................................................... 109 Non-financial sector .................................................................................................................... 109 Monetary policy environment .................................................................................................. 109 Domestic and external demand .............................................................................................. 110 Inflation .................................................................................................................................. 111 General government ............................................................................................................... 112 Sovereign rating 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