European Central Bank officially revokes license of Baltic International Bank

Take note – story published 1 year and 3 months ago

On March 10, 2023, the European Central Bank (ECB) took a decision to withdraw the banking license of Baltic International Bank SE, according to a Latvian central bank (Latvijas Banka, LB) press release on March 13. The decision took effect on 11 March 2023.

"The ECB decision has been made on a proposal from the Financial and Capital Market Commission (FKTK). As of 1 January 2023, the FKTK has been integrated into Latvijas Banka.

"To ensure the stability of Latvia's financial sector and protect the interests of the bank's customers the FKTK Board, during its extraordinary meeting of 12 December 2022, decided to suspend the provision of financial services at Baltic International Bank SE," the central bank said, as LSM reported at the time.

 Following the entry into force of the ECB’s decision, Latvijas Banka will draw up and submit to the court an application on the start of winding-up proceedings and the appointment of a liquidator.

Founded in May 1993, BIB was the first bank to offer private banking to wealthy customers in Latvia following the restoration of independence, in the process setting the model for the boutique banks that would grow into a huge financial sector – a sector that was initially championed as a success story but would ultimately lead to Latvia gaining an unwelcome reputation as a center combining money laundering, shell companies and offshore tax schemes.

Following the collapse of ABLV bank in 2018, a concerted and largely successful effort has been made to clean up the financial sector and rid Latvia of banks reliant upon non-resident cash flows from the east.

Back in 2019, FKTK fined BIB 1.6 million euros for "deficiencies in the Bank’s internal control system". Before that, in 2016, FKTK imposed another million-euro fine on the bank for infringements of anti-money laundering requirements.

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