Financial regulator goes on the offense

The head of Latvia's financial regulator has launched a bitter attack on what it called "high public officials" whom it accuses of disseminating false information about its work.

"The Financial and Capital Market Commission (FKTK), having assessed the information provided by high public officials on the functioning of the FKTK, its tasks and performance in the field of financial crime prevention, concludes that false information on the FKTK's operations has been deliberately disseminated in the public space," a FKTK statement released in Latvian on April 3 and in English a day later, says. 

Referring to recently-announced plans to change the way the board of FKTK is selected - which would involve current chairman Peters Putniņš having to re-apply for his job in an open competition, the statement from the Financial and Capital Markets Commission (FKTK) says it has "expressed its opinion to the Ministry of Finance on the amendments to laws related to the reforms of the financial sector control system planned by the government, and according to the conclusions of the FKTK experts on the amendments to the FKTK law and Credit Institution Law, the planned rules duplicate existing legislation, they are declarative and do not have the slightest connection with the objective, defined in the indicative abstract of the bill, - to extend the FKTK's operational objectives and functions in order to strengthen the prevention of money laundering or combating financial crimes, as above mentioned has been already implemented as part of the day-to-day work. In fact, problems that do not exist in the prevention of financial crime are being addressed, because the financial supervisor has been performing above tasks, in particular in the banking sector."

Comments attributed directly to FKTK Chairman Pēters Putniņš say: 

"To my mind, in a civilised society, the reform process is started with discussions and drafting plans. In this case, we learn from the media as if we would have to approve the financial crime prevention mandate, however, we already have one in place.

"Monitoring of this area by the FKTK is already provided for by law, and there is no need to back it up again. We now understand that the overhaul will be implemented in the form of replacing the Board of the FKTK. Therefore there is no need to amend laws or go against international principles, e.g. the principles set by the Basel Committee on Banking Supervision, as ill-conceived action may cause serious problems for the government and reputation," Putniņš added.

Nevertheless the combative statement is slightly undermined by the fact that at no point does Putniņš actually name those he accuses of deliberately disseminating falsehoods, though by implication he must mean Finance Minister Jānis Reirs and Prime Minister Krišjānis Kariņš, who have both strongly backed reform of FKTK.

The full statement, which contains lengthy claims about improvements made to the regulatory system over the last four years, can be read online at the FKTK website

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