bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 06.04.2020 | Name days: Filips, Vīlips, Zinta, Dzinta
LatviaLatvia

Kazāks: FKTK merge with the Bank of Latvia has more advantages than disadvantages

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Bank of Latvia, FKTK, reform, merge, economy, supervision

Mārtiņš Kazāks

The merge of the Bank of Latvia and Finance and Capital Market Commission (FKTK) has more advantages than disadvantages. Nevertheless, in this case it is important to separate monetary policy and financial market monitoring functions, as well as ensure reserves of the Bank of Latvia are not affected in litigations with the supervisory institution, said governor of the Bank of Latvia Mārtiņš Kazāks.

«It is necessary to perform a detailed assessment. Still, there are more potential benefits. One is associated with information exchange – it can be made faster and more efficient. The same applies to views and possibilities of influencing the development of the financial services market in the future. I believe this would be more useful this way. Latvia’s economy is small, so there is also the matter of qualified specialists. A single institution can find a way to achieve a much better synergy in relation to different kinds of competences,» said Kazāks, adding that the cost reduction topic is no less important.

He does stress, however, that a potential merge of both institutions also creates risks, which have to be taken into account when making decisions.

«The most important factor – monetary policy and financial market supervision have to be clearly separated functions. There needs to be a very clear and very well-functioning Wall of Chine separating them,» stresses the governor of the central bank.

Kazāks also notes that the Bank of Latvia manages the country’s strategic investments and gold reserves, but the financial sector’s regulator in engaged in litigations over decisions market participants do not agree with.

«I allow the desire to sue the Bank of Latvia, which manages large investments, including Latvia’s gold, may increase more. This is why it is necessary to clearly define that by overtaking the financial sector’s supervision function all of the state reserves are put at risk,» stresses Kazāks.

He notes that this may make the merging process very complicated. To make this decision, it is necessary to hold a discussion and assessment to balance risks with benefits.

«If it is decided that both institutions should be merged, this will mean amending the Law on the Bank of Latvia. Based on the current plan, the legislative draft needs to be submitted to the Saeima by 31 October. Hopefully the decision will have been made before the end of 2020. Additionally, both institutions have to be able to secure quality for their own functions so that the merging of both institutions is reasonable, well-organized and well-communicated. This cannot be done overnight – the process needs to be well-coordinated,» said Kazāks, adding that in any case both institutions are unlikely to end up under the same roof sooner than 2022.

The head of the central bank admits FKTK has done a lot of good in market supervision. «At the same time, if we look at the current finance market situation, we have to admit that there have been failures. Money laundering prevention cases have not been sufficiently well-supervised,» adds the governor of the Bank of Latvia.

Read also: Latvia is doing everything to avoid getting grey-listed, says Kazāks

He also says FKTK’s communication with the finance sector has not been good enough lately.

«Unfortunately, we can see in many cases banks choose to avoid risks instead of managing risks. There will always be unclear situations, the market will exaggerate. However, the situation in Latvia has gone too far. This is why it is good to see the new FKTK head to have named this topic as one of her priorities – discussing what is permitted and what is not, what should be done and what should not. Banks should learn to manage risks to avoid situations when financial institutions choose not to take risks,» says Kazāks.


Leave a reply

Spanish coronavirus death toll drops for fourth day in a row

In Spain, for the fourth day a row, the number of COVID-19 related deaths per day has decreased as the country has the most confirmed cases in infection in Europa, BBC reports.

Recovery from COVID-19 confirmed for 16 people in Latvia

So far 16 people in Latvia have made a successful recovery from COVID-19, as reported by Latvian Disease Prevention and Monitoring Centre (SPKC) Infectious Diseases Risk Analysis and Prevention Department director Jurijs Perevoščikovs at a press-conference on Monday, 6 April.

Kilometre-long freight train from China to pass through Latvia this week

This week a freight train pulling 100 containers forming a kilometre-long chain will pass through Latvia on its way from China to Kaliningrad Oblast, as BNN was told by Latvian Railway.

Design work commences across the entire Rail Baltica route in Latvia

Rail Baltica project management joint company RB Rail has signed two contracts on behalf of Latvia’s Transport Ministry for design and design supervision services on the remaining sections of Rail Baltica route in Latvia, as BNN was informed by the company.

Meduza: Head of Russian doctors’ organisation arrested during delivery of protective equipment to hospitals

The chairwoman of the Russian Doctors’ Alliance has been hit after being arrested by police as she was in a group of activists trying to deliver personal protection equipment to hospitals in the Novgorod region of Russia, Meduza news portal reports.

NEPLP wants 1.6 million euros for media to overcome COVID-19 crisis in Latvia

The National Electronic Mass Media Council has prepared historically the largest state support programme for electronic TV and radio to ensure uninterrupted production of domestic content and broadcasts during COVID-19 crisis. The volume of support is estimated at 1.6 million euros, as reported by NEPLP.

Estonian top virologist: Peak of COVID-19 will be flattened out

Estonian virologist Irja Lutsar, who is part of the Estonian government’s working group of COVID-19 has forecast that the peak point of the outbreak of the novel coronavirus in Estonia will be long, Estonian public broadcaster ERR reports.

COVID-19 infection numbers in Baltics. 542 in Latvia, 843 in Lithuania and 1 108 in Estonia

The number of confirmed COVID-19 infection cases in Latvia has reached 542, increasing by nine new cases in a day. Lithuanian media, meanwhile, report 843 coronavirus infection cases.

Kazāks: the virus causes Latvia’s economy to drop 2-3 percentage points every month

Because of restrictions adopted to restrict the spread of COVID-19 in the country, Latvia’s economy drops 2-3 percentage points every month, said governor of the Bank of Latvia Mārtiņš Kazāks in an interview to Latvijas Radio on 6 April.

British Prime Minister hospitalised 10 days into coronavirus infection

In the United Kingdom, Prime Minister Boris Johnson has been admitted to hospital ten days after receiving positive tests for COVID-19, British public broadcaster BBC reports.

Universities in Latvia have no plans for entry exams if central exams are cancelled

If central exams in Latvia are cancelled, universities have no plans to organize entry exams, because this would require additional resources.

Number of COVID-19 infections increase in the 50 to 59 age group in Latvia

The number of COVID-19 infections in the 50 to 59 age group has nearly doubled in the past week, reaching 83 cases, according to the latest data from the Disease Prevention and Monitoring Centre.

Greece introduces quarantine in two migrant centres

Authorities in Greece have introduced the restrictions of a lockdown in two migrant centres after people tested positive for COVID-19, German public broadcaster DW reports.

COVID-19 update in Baltics. 533 infections in Latvia, 811 in Lithuania, 1 097 in Estonia

The number of confirmed COVID-19 infection cases in Latvia has reached 533 so far, increasing by 24 new cases in one day. Lithuania, meanwhile, reports 811 confirmed cases.

Week in Lithuania: ex-President lands UN job, car entry from Belarus and Russia banned, medics’ salaries go up

Last week, the top news stories in Lithuania were, ex-President Dalia Grybauskaitė receiving a post in the UN, cars from Belarus and Russia being banned and Conservatives’ leader urged to expel Orban’s Fidesz from EPP.

BNN summary of the week: a new economy minister. Lagging budget plan. Radzevičs’s negligence?

BNN gives you a summary of the key events of the past week, told in news stories of the following topics: song and dance next year; post; debt write-off; new minister; decline and unacceptable numbers.

Coronavirus in Baltics. 509 in Latvia, 771 in Lithuania, 1 018 in Estonia

The number of confirmed coronavirus COVID-19 infections in Latvia has reached 509, increasing by 16 new cases over the last day. Lithuania, meanwhile, reports 771 infections

airBaltic to cancel up to 50% of planned flights until November 2020

As the crisis caused by COVID-19 pandemic continues in Latvia, the country’s national airline airBaltic has decided to cancel nearly 50% of planned flights until November 2020, as reported by the airline’s representative Alise Briede.

Latvian government increases penalty for breach of COVID-19 restrictions

On Thursday, 3 April, Latvia’s Saeima approved amendments to the Latvian Code of Administrative Violations in the final reading. The new changes increase the fine for violation of epidemiological security requirements, as well as restrictions imposed for the duration of the state of emergency in the country.

Estonian government to help local governments with supplementary budget

The Estonian government has submitted to legislators a supplementary budget aimed at allocating to local governments 30 million euros and another 100 million to help continue economic activity in the country, Estonian public broadcaster ERR reports.

Home. Soap. Two metres – SPKC reminds residents of the main safety measures

COVID-19 coronavirus spreads through direct contact with an infected person through droplets when a person sneezes of coughs, or by touching surfaces the infected person had previously sneezed or coughed on.

Belarus rejects Lithuania’s worries about alleged hiding of COVID-19 data

Minsk has rejected the concern voiced by Lithuania that alleged inadequate reaction to the spread of COVID-19 in Belarus could turn the country into a hotspot, which endangers Lithuania, LRT reports.

COVID-19 pandemic and corruption risks. How can government and society defend against them?

During a state of emergency, it is important for the Saeima, Cabinet of Ministers, Crisis Management Council and other officials to make decisions quickly and ensure completion. However, in such a situation there is a risk of dishonest officials abusing their powers for personal gain, risking the quality of democracy.

First death from COVID-19 confirmed in Latvia

The first death from COVID-19 coronavirus has been found in Latvia, as reported by public media lsm.lv.

UN General Assembly calls for closer cooperation to contain pandemic

World’s nations in the UN General Assembly have unanimously passed a resolution confirming the unprecedented effects of COVID-19 and calling countries for increased cooperation, Qatari broadcaster Al Jazeera reports.


Do NOT follow this link or you will be banned from the site!