Recent developments as regards the situation with ABLV Bank differ considerably, as compared to 2008, given the stability of the financial sector and high financial performance indicators. The Ministry of Finance (MoF), the regulator of the financial sector - the Financial and Capital Market Commission (FCMC) and the European Central Bank (ECB), in collaboration with the Bank of Latvia, are professionally working in the 24/7 mode to control the situation, fully respecting the interests of the population and entrepreneurs.
Latvia’s financial system is stable and necessary steps have been taken to ensure that the international financial commitments and interests of the people of Latvia are fully respected.
The Bank of Latvia has a capable board and council, and it works in its usual effective manner. Latvia’s Corruption Prevention and Combatting Bureau (KNAB) investigation against the President of the Bank of Latvia are not related to any of currently in Latvia operating credit institutions, including AB.LV bank.
According to the recommendation of the European Central Bank, limitations have been imposed on the operation of AB.LV bank: it is possible for the bank to receive all types of payments, while outgoing payments are limited. In addition, there are no limitations on disposing the securities, thereby accumulating funds required for liquidity. The ECB took this decision in order to stop the rapid outflow of funds from AB.LV bank and give time to prove that the AB.LV bank has both a long-term business plan and a possibility to accumulate necessary funds for short-term liquidity. AB.LV bank is currently drafting such a plan and plans to submit it to the Financial and Capital Market Commission (FCMC) by 22.02.2018.
Latvia’s law-enforcement institutions are independent, they operate in accordance with relevant Latvian and international regulation. They enjoy full support and confidence of the Government of Latvia.
The United States has full confidence that the Government of Latvia will take the necessary steps to uphold the integrity of its banking and financial sector. For many years, we have been working together with Latvia to combat corruption, money laundering, and other threats to international security. Moving forward, the United States supports and will continue to help the Government of Latvia, the Latvian Financial Capital and Markets Commission, and Latvian law enforcement to realize our shared vision of a strong and well-regulated Latvian financial sector.
On Monday, January 15, Japanese credit rating agency R&I upgraded Latvia`s credit rating to A- from BBB+ and assigned stable rating outlook.
On Thursday, December 14, the Minister of Finance Dana Reizniece-Ozola and the State Secretary of the Norwegian Ministry of Foreign Affairs Jens Frølich Holte signed the Memorandums of understanding on the Implementation of the European Economic Area (EEA) and Norwegian Financial Mechanism in 2014 - 2021. The memorandums provide to Latvia support in amount of 102.1 million euro, which, for both mechanisms in total, is by 29.15 million euros or 40 per cent more than in the previous period.
Estonia, Latvia and Lithuania have agreed to create a pan-Baltic capital market to strengthen their economies and stimulate investment to create jobs with support of the European Commission (EC) and the EBRD.
On Friday, October 27, the international credit rating agency Fitch affirmed its 'A-' long term foreign and local currency sovereign credit ratings on the Republic of Latvia. The outlook is set stable.
On Friday, September 22, international credit rating agency S&P Global changed Latvia`s credit rating outlook to positive from stable. S&P Global has affirmed the Foreign Currency Issuer Rating at A- .
On Friday, July 14, the international credit rating agency Moody`s affirmed its 'A3' long term foreign and local currency sovereign credit ratings on the Republic of Latvia. The outlook is set stable.
If Latvia wants to meet the rising expectations among its citizens for better public services, such as health, education, and transportation, it should consider increasing revenues through improving its taxation system, according to the World Bank.
The forthcoming report, which will summarize the findings from a year-long review, finds that tax revenues in Latvia are lower than in many similar countries, while social inequality remains higher in comparison to many European Union (EU) countries. The tax revenue to GDP rate in Latvia, at some 29 percent, in one of the lowest in the EU – 10 percentage points below the EU average and about 5 percentage points below the Organization for Economic Cooperation and Development (OECD) average.
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