How the Banking System of Estonia Looks?


How the Banking System of Estonia Looks?
Estonia's banking system consists of the Bank of Estonia and the network of commercial banks, of which each year is steadily decreasing, both by unions and mergers, as well as deprivation of licenses for their activities.

 In 1998, the merger of the four largest banks: Hansabank and Sberbank Ühispank and Tallinn bank. United as Foreksbank and Investment Bank. Bankrupt Maabank (Land Bank). Thus, the number of commercial banks in Estonia by the end of the year was 7. In general, according to experts - is improving the process leading to the strengthening of the banking system.

Main Bank of Estonia has developed and implemented a number of measures to tighten requirements for reliability and streamline the banking system (capital adequacy requirements to improve liquidity, the transition to a more conservative policy). As a result, there has been some slowdown in credit growth and higher interest rates on loans and deposits. Overall, the banking system is stable with sufficient reliability.

In the late 90s, the Law on the protection of deposits, related primarily to small and medium investors. Some of the fundamental provisions of the Act have been early adopted by the Government and the Bank of Estonia in the aftermath of the bankruptcy Maabanka this summer. In the transition to a single European currency "Euro" at the Bank of Estonia is working on possible scenarios entering the Estonian kroon in a single currency system. At the same time, during the stock market crisis Estonian Kroon confirmed its stability.

Foreign study on the evaluation of foreign direct investors Estonian banking sector based on data for 1996-1997. Demonstrate their credibility and very favorably on its performance in general, compared with other factors conducive to investment, and in the general use of the services of the Estonian commercial banks (taking deposits, transactions iostrannoy currency payments and others.

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