Вe­cline of high-risk clients in Latvia’s bank­ing sec­tor will speed up soon

Baltic News Network - - News -

Con­sid­er­ing re­cent de­vel­op­ments in Latvia’s fi­nan­cial sec­tor, the de­cline of high-risk clients in the coun­try’s bank­ing sec­tor will be­come more rapid soon, said chair­man of Ci­tadele Bank’s board and As­so­ci­a­tion of Lat­vian Com­mer­cial Banks Gun­tis Beļavskis.

«The pro­por­tion of high-risk clients in Latvia’s bank­ing sec­tor had de­clined con­sid­er­ably even be­fore this scan­dal. It came as a re­sult of our co­op­er­a­tion with the reg­u­la­tor. I think these events will serve as cat­a­lysts for the process and force banks to sort their op­er­a­tions more ac­tively. We ex­pect the pro­por­tion of high-risk clients in Latvia to con­tinue re­duc­ing in the fu­ture,» said Beļavskis.

At the same time, he men­tioned that it is vi­tal to sep­a­rate non­res­i­dents’ busi­ness from high-risk clients’ busi­nesses. «We al­ways put ev­ery­thing in the same bas­ket. How­ever, there are some [non­res­i­dent] busi­nesses that could re­main – com­pa­nies and pri­vate per­sons with high in­come. That is the sweet piece all the world’s banks want to have. Proxys and dead-end busi­nesses are the ones that should go. The ques­tion is the speed of this process,» said Beļavskis.

As it is known, Euro­pean Cen­tral Bank made the de­ci­sion to com­mence the liq­ui­da­tion process, which is to be re­al­ized in ac­cor­dance with Latvia’s laws.

Fol­low­ing ECB’s in­struc­tions, FCMC ap­plied pay­ment re­stric­tions on ABLV Bank on 19 Fe­bru­ary. Be­cause ECB gave no in­struc­tions to lift re­stric­tions, FCMC de­cided on the night to 24 Fe­bru­ary that un­avail­abil­ity of de­posits took place in ABLV Bank.

ABLV Bank ad­mits the de­ci­sion made by FCMC means liq­ui­da­tion process will soon com­mence. ABLV Bank links the com­mis­sion’s de­ci­sion with po­lit­i­cal rea­sons.

Prob­lems for ABLV Bank started when Fi­nan­cial Crimes En­force­ment Net­work (FinCEN) of US De­part­ment of Trea­sury an­nounced in the mid­dle of Fe­bru­ary that it plans to es­tab­lish sanc­tions against ABLV Bank for money laun­der­ing ac­tiv­i­ties that had as­sisted with North Korea’s nu­clear arms pro­gramme, as well as il­le­gal ac­tiv­i­ties in Azer­bai­jan, Rus­sia and Ukraine.

The re­port pub­lished by FinCEN de­tails that un­til 2017 the man­age­ment of ABLV Bank had been us­ing bribery to in­flu­ence of­fi­cials in Latvia in an at­tempt to avoid le­gal ac­tion and threats to its high­risk op­er­a­tions.

Ieva Čīka/LETA

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