Decision on new financial regulator put on hold

Plans to install a new financial regulator to oversee important reforms of the banking sector have been put on hold in an unexpected development October 1. 

As recently reported by LSM, the open competition to find a new chief for Latvia's financial regulator the Financial and Capital Markets Commission (FKTK) - a crucial position giving the ongoing campaign to restore the credibility of the scandal-wracked sector - concluded in September with the winning candidate named as Santa Purgaile.

Her appointment was expected to be approved by the Cabinet of Ministers October 1, before final approval by the Saeima, but after objections were raised by Regional Development and Environment minister Juris Pūce (For Development/For!) the decision has been put on hold.

Pūce said that while Purgaile has experience working in the banking sector she had no experience in banking supervision, and went on to express doubts about her ability to deal with the clean-up of the banks, saying he would vote against her candidacy.

Ministers representing the National Alliance and KPV LV parties also said they had doubts about the suitability of Purgaile to head FKTK, as they had not had a chance to interview her directly. A vote on her candidacy was postponed for a week.

The development is likely to concern Latvia's international partners, who have repeatedly been assured that Latvia is serious about turning around its long-won reputation as a global money-laundering hub. The contest for the FKTK job took place oer several rounds and received vetting from national security and law enforcement agencies, so the notion that someone unsuited to the job could emerge as the best candidate would be a cause for concern - as would the objections of a minister if the winning candidate was in fact qualified, capable and ready to get to grips with money-laundering and malfeasance in the banking sector. 

Purgaile has been working for JSC Citadele banka since 2012, initially as Business Development Director and later, from 2017, as Corporate Customer Services Director. During these seven years Purgaile was also a member of the Management Board of JSC Citadele banka.

It is not the first time a competition to find a high public official with a brief to crack down on corruption and illegal money flows has hit problems. Last year the new nominee head of the state tax service (VID) was revealed after a similar contest but withdrew his candidacy within days.  

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