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Wednesday 17.01.2018 | Name days: Tenis, Dravis
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Bank of Latvia wants the state to lose money at Parex Bank

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU, Filips Rajevskis

Parex Bank minority shareholder Filips Rajevskis

Currently, the Bank of Latvia is doing everything so that the state loses the deposited money for Parex Bank’s bailout, one of the bank’s minority shareholders Filips Rajevskis told the business portal Nozare.lv.

He noted that it was already from the very start the Bank of Latvia did not approve of the creation of a bad bank by transferring the good assets to the new bank. So, by not exempting Parex Bank from mandatory reserve requirements, it wants to prove it was right.

Also, Rajevskis himself is confident a wrong path has been chosen for the bank’s restructuring and the bad assets should have been transformed into a fund. However, he believes the bank’s license revocation to release it from making mandatory reserves would cause even larger losses both to the state and minority shareholders.

He emphasized revoking the license of the credit institution, which itself is a valuable asset, would further reduce Parex Bank‘s value, with each such step only creating further losses to all parties involved.

Rajevskis denied minority shareholders are interested in the bank’s insolvency or liquidation, underlining they would not benefit from that.

Similarly as the state, we want Parex Bank to show as good performance as possible and recover as much financial resources as it can, Rajevskis pointed out, dismissing rumors minority shareholders are interested in starting the bank’s insolvency or liquidation process. To his mind, such actions from the part of minority shareholders would not be logical.

As reported, Parex Bank‘s minority shareholders currently own 3.56% of the bank. They include the bank’s former owners Valērijs Kargins and Viktors Krasovickis, as well as their families. Krasovickis had previously confirmed both families’ total investment in Parex Bank’s capital comprises about 36 million lats.

As reported, on Monday, May 2, the Bank of Latvia released a statement on its website, explaining it is entitled to exempt credit institutions from mandatory reserve requirements only if the Financial and Capital Market Commission (FCMC) cancels the credit institution’s license, the credit institution has been declared as insolvent or to be liquidated or the FCMC decides to set such rights and operation restrictions leading to the suspension of payment settlements, namely, due to the restrictions the credit institution cannot meet the mandatory reserve requirements in line with the law.

The FCMC head Anna Dravniece informed the Commission has received the Bank of Latvia’s response to the request made by the FCMC to exempt Parex Bank from meeting the mandatory reserve requirements. However, the letter was classified as restricted availability information and therefore the FCMC cannot comment on its contents.

The Bank of Latvia representative Kristaps Otersons explained the letter sent to the FCMC has been appointed a restricted availability status, because it contains information about the credit institution’s activities, which the Bank of Latvia is not authorized to make public in line with the Information Freedom Law.

However, he claimed the Bank of Latvia refers to cases it is authorized to exempt a credit institution from fulfilling mandatory reserve requirements and to the fact that currently Parex Bank does not meet any of these criteria.

 

 

 


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