The Financial and Capital market Commission (FCMC) informs that the situation in the Latvian financial sector has been prudently monitored in cooperation with the European Central Bank (ECB). Latvian competent authorities perform functions attributed to them, including the FCMC, which ensures regular exchange of information with the Ministry of Finance, Bank of Latvia and other competent authorities.
FCMC Deputy Chairwoman Gunta Razāne:”On the FCMC side, I can say that our banks meet the regulatory requirements with considerable reserve. Capital and liquidity ratios remain at high levels. The average ratio is above the European average, liquidity ratio is even as twice as high. We ensure all the necessary supervisory activities in the financial sector and monitor the current situation. The key task of the financial regulator is to ensure stability and protect the depositors’ interests, and this work is being performed now.”
FCMC Deputy Chairwoman Gunta Razāne: “We analyse potential scenarios also regarding AB LV Banka in cooperation with the ECB, the direct supervisor of AB LV Bank. The ECB may delegate to us some of their powers and it is done, and we have adopted a decision of appointing a group of three authorised persons from the FCMC at the Bank, to ensure monitoring and relevant liaison. Currently, we analyse the up-to-date information; and this is natural in this situation that restrictions are set on the Bank regarding transactions in the US dollars.”
FCMC has already pointed out that significant remedial work has been done in AB LV Bank by the FCMC*, and the main substantive issue that now should be addressed by the Bank is overcoming as soon as possible its potential isolation related to its business partners due to reputational risk. Whereas the regulator’s role is to take care to ensure compliance with statutory indicators, so that the Bank would be able to ensure that it meets its obligations to the clients based on its infrastructure and assets.
FCMC performs its work as an autonomous public institution and adopts its decisions independently for the purposes of supervisory activities. FCMC Deputy Chairwoman Gunta Razāne: “As regards the exertion of any external pressure on the FCMC – I possess no such information. We herein must all bear in mind that the FCMC decisions are adopted by the Board of five members. These persons make their decision autonomously. Each of Board members adopts the decision based on the information available to the FCMC at the moment and prepared by the colleagues.”
*From Proposal of Special Measure against ABLV Bank, as a Financial Institution of Primary Money Laundering Concern:
*”In a positive development, since 2015, the FCMC has led significant efforts to reform Latvia’s AML/CFT regulations and enforcement regime. However, as noted in the aforementioned 2014 ECFIN report, positive changes need to be consistently implemented jointly with the banks. The need to improve the institutional capacity remains a long-term challenge due to the complexities of investigating and prosecuting money laundering.”
Head of FCMC Communications Division
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