"The European Central Bank (ECB) has adopted today a decision to withdraw the authorisation of JSC “TRASTA KOMERCBANKA”. The ECB decision was based on the proposal submitted to the ECB by the Financial and Capital Market Commission (FKTK) in view of the fact that the Bank had been committing serious and sustained breaches of regulatory requirements in several areas for a long period," FKTK said in a statement.
"Moreover, based on the assessment made by the FKTK in its capacity as Latvia's national resolution authority, a resolution action or a public bail-out of the Bank would not be in public interest."
"In January 2016, the FKTK imposed restrictions on the Bank's activities, resulting from a number of identified serious and sustained breaches of regulatory requirements by the Bank, existing for a long period.
"In particular, the Bank has been failing to comply with the regulatory capital requirements, while the Bank’s shareholders have not been able to address this non-compliance by increasing the Bank's capital, thereby violating provisions of the Regulation (EU) No 575/2013 and of the Latvian Credit Institutions Law."
"Moreover, the FKTK ascertained that the Bank has been operating with losses for a long period and has no viable business model or development strategy adequate to the situation. In addition, serious and sustained breaches of the anti-money laundering and counter-terrorist financing regulations were identified in the Bank's activities," FKTK said.
The ECB adopted a decision withdrawing the Bank’s authorisation on 3 March with the effect at 24:00 Latvian time on the same day, it added.
Trasta has featured in numerous allegations of money laundering including the notorious Magnitsky case.
Compensation of eligible deposits up to EUR 100,000 is guaranteed by the State.
Latvia has in recent weeks stepped up efforts to show it is serious about addressing allegations of money laundering within the boutique banking sector to prove it is ready to join the Organization for Economic Cooperation and Development (OECD).