Rietumu bank switches operating currency to euros amidst reputation crisis in Latvian banking sector

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The board of Rietumu banka, which is widely regarded as the most successful of Latvia's numerous banks specializing in "non-resident" business, has changed its operating currency of its customers to the euro, amidst a reputation crisis in Latvia's banking sector, the bank told the press March 14.

The bank invites the exchange US dollars to euros between its customers, and any funds left in US dollars will be automatically changed to euros.

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"The decision about changeover to euro as the basic operating currency on client’s current accounts has been taken allowing for the fact that support of functioning of payment in USA dollars may be troubled due to the reputational risk of Latvian banking system," the bank said in a statement.

"This decision will remain in force until the moment when the questions of international partners regarding risk of money laundering in Latvian banking system will be taken off the table and reputation of the system will be recovered," Rietumu said.

On a separate occasion, on March 16 Rietumu told the LETA news agency that it has been turning away high-risk clients for the past several years and has significantly reduced the amount of transactions.

Latvia's banking sector, particularly the banks serving non-resident clients, has been facing a reputation crisis following the implosion of ABLV Banka after the US accused it of money laundering and facilitating transactions to North Korea.

Furthermore, Latvia's central banker Ilmārs Rimšēvičs was detained and is now a suspect in a bribery probe. 

Rietumu banka was the fifth largest bank in Latvia by assets in late 2017, according to data by the Association of Latvian Commercial Banks, which Rietumu left in 2016.

The bank's main shareholders are Esterkin Family Investments (33.12 percent), Maltese company Boswell (International) Consulting Limited (33.11 percent), and Suharenko Family Investments (17.34 percent).

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