Banking in Estonia covers banking in Estonia. Banking started with the establishment of the central bank, the Bank of Estonia in 1919.[1][2] It lost control during the Soviet period when banking was controlled from Moscow by Soviet powers. It was reestablished in 1990. As of 2022[update] it consists of the central bank and a number of commercial banks providing banking and financial services. Many of the commercial banks operating in Estonia are foreign banks primely from Scandinavia.
History
Pre-WWII
On 24 February 1919, the central bank – Bank of Estonia – was established.
In 1940, when Estonia was incorporated to Soviet Union, the Bank of Estonia was nationalized.
Bank of Estonia was re-established on 1 January 1990.
In early 1992, both liquidity problems and structural weakness stemming from the communist era precipitated a banking crisis. As a result, effective bankruptcy legislation was enacted and privately owned; well-managed banks emerged as market leaders.[citation needed] Today, near-ideal conditions for the banking sector exist. Foreigners are not restricted from buying bank shares or acquiring majority holdings.[citation needed]
On 20–22 June, the monetary reform of Estonia took place. During the reform, Soviet roubles were exchanged to Estonian krones.
On 23 June 1992, Estonia became a member of World Bank.
In 1992, 21 commercial banks established Estonian Banking Association (Estonian: Eesti Pangaliit).
In 2004, Estonia became a member of European Union. After joining, preparatory works for euro started. Since 2011, euro is the new currency in Estonia.
As of 2017, the association has 13 member banks.[3] As of 2017, operation rights have been given to 9 credit institution (Estonian: krediidiasutus). The most popular banks are Swedbank, SEB Bank, Nordea Bank ja LHV Bank. Most of the banks in Estonia are actually sister enterprises of Swedish bank groups. However, e.g. LHV Bank is established in Estonia.
