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Estonia’s Financial Regulation Practices Under Scrutiny

Tallinn, Estonia - A recent assessment has revealed that Estonia’s financial regulation practices are largely transparent and open, with room for improvement in a few areas.

Assessment Findings

The evaluation, conducted by [Assessment Body], found that the Bank of Estonia (BoE) and the Ministry of Finance (MOF) have made significant strides in promoting transparency in their financial policies. The BoE has been commended for its clear definition of roles, responsibilities, and objectives, as well as its efforts to provide public access to information on supervision policies.

Strengths

Bank of Estonia

  • Clear definition of roles, responsibilities, and objectives
  • Efforts to provide public access to information on supervision policies
  • Annual report and website are rich sources of information on banking supervision, payment systems, and financial reporting
  • Transparency practices have also been praised, with significant changes in financial policies publicly announced before being enforced

Areas for Improvement

Lack of Formal Consultation and Information Sharing

  • The evaluation highlighted a lack of formal consultation and information sharing between the BoE and the Securities Inspectorate (SI)
  • Need for general policy principles on risk management for payment system participants to be specified and disclosed

Insurance Regulation

  • The MOF has clear definitions of roles, responsibilities, and objectives
  • The Insurance Supervisory Authority (ISA) carries out supervision and reporting to the MOF
  • ISA’s transparency practices have also been praised, including its publication of reports on its activities and financial performance
  • However, public consultations are held for proposed substantive technical changes to insurance regulations, but the consultation period is often less than a month, which may not be sufficient

Conclusion

Overall, Estonia’s financial regulation practices have been commended for their transparency and openness. However, there is still room for improvement in areas such as formal consultation and information sharing between regulatory bodies, as well as the development of clearer policy principles on risk management.