Latvian central bank publishes annual report

The Council of Latvijas Banka has approved the Annual Report of the central bank for 2021, and it is now available to read online on a bespoke website at https://annualreport.latvijasbanka.lv (as well as on the usual website at: https://www.bank.lv/en/publications-r/news-and-articles/press-releases/12921-on-the-financial-performance-of-latvijas-banka-in-2021).

Mārtiņš Kazāks, Governor of Latvijas Banka, stresses in the Foreword to the Report that Latvijas Banka has managed to accomplish a number of things as well as to commence the implementation of a series of new tasks aimed at strengthening the financial sector in the future.

Among other things, a new and modernised Law on Latvijas Banka has been adopted by the Saeima which sets a framework for the joint operation of the central bank and the financial market supervisor – the Financial and Capital Market Commission (FKTK) – as a single institution from 1 January 2023. The preliminary steps towards the merger of Latvijas Banka and the FKTK were already taken in 2021.

Latvian central bank in 2021

"The central bank's management model experienced substantial changes last year, i.e. the central bank's Board was dissolved and the transition to a single-tier top level management took place. Thus, the current policy of ensuring an efficient and high-performance operation of the central bank through doing more and better, using the same or less resources has been continued," the central bank said, adding that it had "carried out significant work in its business areas, for example, the development of the instant payment infrastructure has been continued via the introduction of modern and innovative technological solutions and attracting new financial markets, including public players (the Treasury) at the beginning of 2022."

Kazāks also stressed that a commitment to sustainability is "not a whim, since we look at both individual work and our shared vision through the lens of sustainability."

"We will continue to work vigorously in the traditional fields of activity by increasingly introducing innovative payment opportunities and instant payments in daily lives of businesses and households, ensuring access to cash across the entire territory of Latvia. We will continue to develop economic research, including also a wider use of the new type of statistical data – data on card-based payments – in the analysis of economic developments, thus helping those implementing the economic policy take better informed decisions," said Kazāks.

Latvijas Banka's profit in 2021 totalled 20.9 million euro, 70% or 14.6 million euro of which have been appropriated to the central government budget; the rest of the profit has been transferred to the reserves of Latvijas Banka. Over the last five years, Latvijas Banka's aggregate profit has reached 113. 2 million euro, with 78 million euro appropriated to the central government revenue.

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