Central banker fights for independent bank controls

Jun 15, 2000

The Bank of Estonia's views on the issue are known and the central
bank has no idea of giving up its idea, the Bank of Estonia press
spokesman told BNS.

What concrete measures the Bank of Estonia would take to stand up for
its idea of creating an independent comprehensive supervision body
was to become clear on June 12 when the Bank of Estonia supervisory
council received an overview of the government plans concerning its
model of the comprehensive financial supervision body.

Kraft told a press conference after his appointment last week that
the optimal settlement for all parties concerned must be found
concerning comprehensive financial supervision.

At the end of May, the Estonian government decided at its Cabinet
meeting that the comprehensive financial supervision body must be an
independent government instititon whose activity would be regulated
by law in the future. The Cabinet's opinion requires confirmation by
a regular session of the government.

The comprehensive supervisory body, to be set up on the basis of the
present banking inspectorate, the securities inspectorate, and the
insurance supervisory body, will not be immediately subordinated to
either the Finance Ministry or the Bank of Estonia, but will be an
institution in the ministry's sphere of activity.

In the opinion of the central bank, the government's views
concerning merger of the financial supervision bodies are unclear and
leave room for a conflict of interests. The central bank said the
government' view does not make it possible to organize financial
supervision in the best possible way.

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