Financial regulator claims non-resident sector has been turned around

Latvia's financial regulator, the Financial and Capital Market Commission (FKTK), released a bullish statement March 13 in which it said an assessment of new business models for former non-resident banks had been completed and, in the words of FKTK chairman Peters Putniņš: "There is no longer any reason to talk about the unrestricted flow of foreign currency that our national authorities would not be able to control."

FKTK has completed an assessment of the new business models of 12 Latvian banks and approved the individual key performance indicators for each bank - capital and liquidity requirements - as well as individual supervisory measures for each bank for this year.

Putniņš said: "I think we will now have a banking sector in line with the size of the economy and its performance in the future. It is now very important to regain a good international reputation, and confidence in our ability to change and self-regulate into a new growth cycle. This is a good starting point for renewing the international reputation of the financial sector." 

Along with a new risk mitigation approach, the Latvian banking sector is now focusing on attracting EU and EEA customers by giving up most of its former customers in former CIS countries such as Russia and Belarus.

FKTK said the banks that used to cater almost exclusively to such clients, and which have been exposed as being involved in everything from money laundering to sanctions-busting  had "freed themselves from the presence of risky foreign customers, including discontinued cooperation with shell companies prohibited in Latvia."

 

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