Initiative calls for freezing Euribor rates on past loans in Latvia

A signature collection has been launched on the public initiative portal on the restriction on banks to raise Euribor rates on loans issued in the past, newswire LETA reported on August 16.

The initiative's representative, Edgars Leščinskis, believes that inflation and the increase in Euribor burden many citizens of Latvia who have credit obligations.

Therefore, he calls on the Latvian parliament, together with the government and the Latvian central bank (Bank of Latvia), to find a way for commercial banks and other finance institutions in Latvia to review and improve the policy and conditions for issuing credit and granting commission in order to encourage borrowers to choose fixed interest rates primarily.

On the other hand, for existing loans, in the current inflation and growing Euribor circumstances, the terms of the contracts should be changed by maintaining the interest rate as it was at the time of taking the loan. If, on the day of the conclusion of any funding agreement with a natural or legal person, the Euribor rate is zero, the Euribor rate should be unchanged at zero throughout the duration of the financing agreement, even though the European Central Bank raises the rate.

The author of the idea points out that financial institutions have calculated a profit percentage into the loan at the outset, and "'that should be enough".

At the same time, the Bank of Latvia and the government should consider what countersteps and solutions they can offer to commercial banks so that this is a mutually beneficial solution, according to the initiative.

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