The stability and credibility of the banking groups operating here, supported by close cooperation between Baltic and Nordic countries also help Estonia overcome the crisis. Banks in Estonia have sufficient funds to support restructuring in both the business sector and the entire economy. Eesti Pank's analyses confirm that the current capitalisation is sufficient to cover possible larger loan losses without banks having to include additional capital. The resources of banks allow their lending decisions to be based on favourable medium-term and longer-term economic outlooks, since Estonia's economic convergence, i.e., the movement of our income level towards that of EU richer countries, will continue also in the future. Thus, the goal of banking and financial sector policy is cooperation with the home countries of the banks operating in the EU and Estonia to ensure the functioning of the common banking market and group-level stability. The steps taken by the home countries of the banks operating in Estonia have considered the interests of the entire group and thus supported financial stability in Estonia. In this light it has to be emphasised that the measures to support the economy approved in Estonia allow state aid also in a situation where financial markets no longer function normally. But the main aim of the state support measures is to organise the financing of starting and exporting enterprises. The total debt burden of Estonia's enterprises is relatively big and a decline in the total volume of debt in 2009 is a natural reaction to previous years' rapid increase.
Effectively implementing the enhanced governance framework, completing the banking union, and building a capital markets union to reduce risk and to allow for more private risk-sharing while establishing additional public risk- sharing mechanisms in parallel are some of the key near-term requirements in this regard. In the longer run, a more perfect EMU will form the basis for a stable, flourishing euro area economy that will not only enable the euro area to tackle challenges in other policy areas, but that will also be to the benefit of global economic and financial stability. BIS central bankers’ speeches  3