Latvian PM comes out against some changes to financial regulator rules

Take note – story published 5 years ago

Prime Minister Māris Kučinskis on May 22 said he opposed legislative proposals that would see all the people in charge of Latvia's financial regulator approved by parliament.

Speaking on LTV's Morning Panorama news show, Kučinskis said some proposals already conceptually and unanimously agreed by Saeima might risk politicizing the role of the financial regulator, the Financial and Capital Market Commission (FKTK).

The proposals as they stand would limit the term of office of the members of the FKTK board, as well as the chairman of the commission and his deputy, to a maximum of six years. At present, the law does not set restrictions on the term of office applying to council members (some of whom have been serving since 2001), though the head of the regulator serves a renewable six-year term.

However, that is not the issue with which Kučinskis has belatedly raised concerns, and he described the idea of imposing a two-term limit on the FKTK chief as "a practical proposal."

The amendments also plan to change the procedure for the appointment of members of the FKTK board, so that in future they will all be appointed by Saeima vote following a joint proposal by the incumbent Chairman of FKTK and the Minister of Finance.

Saeima does get to approve the nominee and vote on the dismissal of an incumbent FKTK chief, as indeed it did with FKTK head Kristaps Zakulis in 2016. Saeima also gets to vote on appointment of the deputy head of the regulator.

"The current procedure [is such that] the Saeima approves the boss and the deputy, while the other [members of the FCMC] are professionals appointed by the chairman of the commission. To give a mechanism with full parliamentary oversight seems to me to be very dangerous," said the prime minister.

"Those clauses in which it specifies that Saeima can appoint and dismiss all board members [should be] removed from the existing proposals," Kučinskis said.

The need to please Saeima could potentially distract financial professionals from managing their respective departments correctly, he warned.

He also said he had discussed the matter with his coalition partners and was "hopeful" they would agree to modify the legislative proposals, "but I cannot predict the result on this question or that," he said.

Kučinskis then took to Twitter to reinforce his point and call for support for the proposals to be dropped.

"I invite the rejection of changes to the law, which would allow Saeima to decide upon the approval and dismissal of all the members of the Financial and Capital Market Commission," he tweeted.

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