"That is the share of non-resident business Latvian banks should have now – around 5%. That is today our requirement, considering the changes in the global financial system and the national security aspects. Latvian banks should revise their strategies, develop different business models and look for new business niches. There is no other possibility. There is no time. It is important to be aware that non-resident business has always been a high risk zone," he said.
Putnins also said that the required high financial stability indicators for banks is a good way to meet their liabilities to customers, for example, by changing the business model, merging, changing their operations license, or choosing to end their business in the financial sector.
"The further steps of the financial watchdog are to assess how flexible each bank’s approach to the change of the business model is and whether there is a substantiated plan on how to reduce the share of high risk non-resident deposits to the required amount," he said.
He also said that implementation of acceptable and sustainable solutions will be a proof of the skills and talents of Latvian bankers to work in challenging and changing times.
Latvian magazine Ir reported that after the visit of U.S. Department of the Treasury Assistant Secretary for Terrorist Financing Marshall Billingslea to Latvia last week, non-resident banking services in Latvia, in fact, will have to be reduced substantially. In the coming months Latvia has to demonstrate real activity in combating money laundering.
After accessing to the OECD, Latvia had promised to reduce non-resident business in Latvian banks and reduce the number of shell companies to 20 percent.
"After last week it is clear that this plan has not been ambitious enough," said Finance Minister Dana Reizniece-Ozola (Greens/Farmers) in an interview with Ir magazine, adding that in a short time Latvia will have to cut its non-resident banking to 5%.