"The most important steps to be taken in the future in the arrangement of the financial sector are related to the proactive elimination of the deficiencies found in the Moneyval evaluation process, the change of the business models of credit institutions, the reduction of the proportion of high risk clients, as well as the improvement of the operation of the Financial and Capital Market Commission and the Control Service system," says the assessment which has Reizniece-Ozola's name attached to it.
"In addition, extra measures should be taken to ensure that undeclared or falsely declared cash is seized at the border, that there is an effective exchange of information between the banking sector and public authorities in digitized form and the exchange of information on politically-linked individuals and residents to strengthen customer due diligence in the financial sector," the summary says.
As previously reported by LSM, the Council of Europe's Moneyval anti money-laundering department has draw up a list if matters Latvia needs to attend to swiftly or risk being placed on a "gray list" that would complicate transactions to and from the country and would likely have serious knock-on effects in the wider economy, as Latvia's ambassador to the United States recently warned.
Also December 27 the financial regulator, the Financial and Capital Market Commission reported that the total assets of the Latvian banking sector shrank by almost 11% during the third quarter of the year, though the fall was almost entirely due to the disappearance from the market of ABLV, which had its license withdrawn after being accused by U.S. authorities of institutionalized money-laundering.
Nevertheless the banking sector operated with a 240 million euro profit in the first nine months of 2018.
