Summary

The evolution of the Estonian banking law in the phase of preparation for re-independence and during the first ten years of its operation is characterised by features common to transitional economy. From the perspective of finance and banking, the ten-year period comprises the following phases: the rise and development of the idea of establishing the national central bank and national currency (1987–1990), the preparation and carrying out of the currency reform (1990–1992), the stabilisation and organisation of banking (1992–1994), focus on qualitative changes in banking and macroeconomics (1995–1997) and the development of activities in conformity with the requirements of macroeconomics and international developments. Although the regulation of banking was different during these phases of development, the regulation is characterised by flexibility, inevitable in a transition economy. The flexibility of regulation is ensured by laws and by directives, resolutions and regulations issued by the Bank of Estonia. The regulation enacted in different phases has focused on the key issues of economy which varied from period to period. Despite the established regulation, banking has also faced problems not only caused by the absence of rules but also by the attitude of people.