Moderately low or low risk level was observed for four out of fourteen banks in Latvia last year, according to the report published by the Latvian Finance and Capital Market Commission (FKTK).
At the same time, seven banks in Latvia had a moderately high risk level in 2020. Three banks had a high risk level.
Data from the commission also showed that the market share of four banks, the risk level of which was moderately low or low in 2020, was 84%, whereas the market share of seven banks with moderately high risk level was 9% asset-wise. The market share of three banks with high risk level was 7% asset-wise.
FKTK noted that in the previous four years Latvian banks significantly reduced their respective risk levels.
“Risk levels have reduced in the most important segments of Latvia’s financial sector – credit institutions and payment institutions,” FKTK notes.
Last year banks in Latvia performed a single horizontal inspection and 12 direct inspections. Three banks were fined EUR 2.03 million after those inspections.
At the end of 2020, a total of 83% of deposits in Latvian banks were domestic, 12% were from other EU member states, 3% were from CIS countries and 2% from other countries. Compared to 2015, the share of Latvian deposits has increased by 36%.
“In 2021, FKTK continued working to improve market participants’ understanding of money laundering and terrorism financing and proliferation prevention issues, a dialogue was established with market participants, different events were organized and guidelines developed. Regulations were also improved. Improvement of the quality of monitoring comes from change in approach to inspections. Methodology is gradually improving, as do workers’ skills and knowledge of effective use of IT tools. FKTK will continue improving the Baltic States and Nordic monitoring platform and will actively participate in experience exchange with other countries,” the commission explains. (BNN/Business World Magazine)
