He says ABLV's main problem was its business model and inability to change it quickly enough.
"As of now, the other banks have benefited from the situation. When a bank fails inside a market, the other players win and stand their ground in the crisis..
"Most of the money from Aizkraukles banka [ABLV] has evidently shifted to other banks; not Scandinavian banks but rather those that serve non-residents," he said.
This means that the risks tied to non-resident deposits in Latvia have not been eliminated, he says. Nevertheless, Latvia's finance sector should undergo brisk changes.
"The salutation from Washington and the European Central Bank says the change should come fast.
"Therefore it's a question of political will - how quickly we can manage this process so that it doesn't cause unnecessary cataclysms," the banker said.
Rungainis hints that the number of non-resident banks may still decrease.
"As the number of clients and the volume [of their assets in Latvia] drops, it's clear that there can't be as many banks in Latvia with this type of business model. While, in the short term, everyone benefits from the disappearance of ABLV Bank, in the medium term we still have [to undergo] a purging process," he said.
The banker also criticized insolvency processes in Latvia. These have proven to be very lucrative for 'insolvency administrators', which is one of the worst-reputed professions in the country.
Rungainis said that the 'self-liquidation' route chosen by ABLV will prove to be a boon both to its founders and the Latvian economy.
"If it undergoes the self-liquidation route, instead of a €3.6 billion bank there could arise a real estate, and private capital investment entity worth several hundred million euros," he suggested.
As reported, ABLV bank, having already described itself as being liquidated by order of the European Central Bank, on the evening of February 26 confirmed the process by voting to wind itself up.
