After Latvia regained independence in 1991, the Bank of Latvia, which was founded in 1991, started to issue new licenses. The first foreign bank opened its representative office in Riga in the year 1994, it was Dresdner Bank AG (Germany).
The Central Bank of Latvia was founded in August of 1990. Bank of Latvia is independent of the Latvian government and is the institution controlling the commercial banking sector. The banking system in Latvia is almost fully private, major part of its control and ownership is with foreign institutions.
After the Bank of Latvia had to cancel licences for several banks in 1994, it became clear that more effective bank supervision is necessary, and relevant amendments to the legislation were introduced in 1995. Along with the introduction of international bank supervision standards, a new law on Credit Institutions was adopted, and banks were subjected to international audit. As a consequence, the Bank of Latvia cancelled licences of 15 banks in 1995 and of additional seven banks in 1996. Four of the top ten banks, including the country’s largest bank, Banka Baltija, were closed.
Since its beginning in 1988, with the establishment of the first commercial banks, the banking system of Latvia has gone through two crises. The first crisis, in 1995, made the banking system to lose about 40 percent of its assets and liabilities, and was connected to the large reduction in the number of banks. The second crisis of 1998 was provoked by the Russian economic collapse. In 1999, Latvian banking sector overcame the negative influence of the Russian financial crisis, and 19 of 24 banks ended the financial year with profit. One bank decided on self-liquidation, another one went on bankruptcy. At the same period, in 1998, two new laws came into force — ‘On the Prevention of Legalisation of Money Received from Crime’, and ‘On Guarantees for Deposits of Natural Persons.’
In 2000, there were structural changes in some of the major banks of Latvia, due to the mergers the number of banks reduced from 24 to 22. The acceptance of the Law on Financial and Capital market Commission was the step to the stabilization of the Latvian banking system. 2001 was very successful year in the banking sector of Latvia. An essential event of that year was the introduction of the united supervision in Latvia, resulting in the Financial and Capital Market Commission uniting the Credit Institutions Supervision Department of the Banking in Latvia, Latvia Insurance Supervision Inspectorate and Securities Market Commission of Latvia.
The principle of banking secrecy is established in many countries, and Latvia is not exception. The Latvian Credit Institutions Law was recently amended with the rules of provision the information by the credit institutions to state institutions, state officials and other institutions. The amendments were also affected by the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime and on the Financing of Terrorism and developing court practice.
From February 2010, the credit institutions are obliged to give information on the existence of a bank account and transactions performed in the bank account to the State Revenue Service, upon their written request, if the tax payer does not file with the State Revenue Service the declarations or tax calculations, or does not make tax payments pursuant to the law requirements. For opening an account we recommend you to contact an agent at http://latviabankaccount.com/
The Central Bank of Latvia was founded in August of 1990. Bank of Latvia is independent of the Latvian government and is the institution controlling the commercial banking sector. The banking system in Latvia is almost fully private, major part of its control and ownership is with foreign institutions.
After the Bank of Latvia had to cancel licences for several banks in 1994, it became clear that more effective bank supervision is necessary, and relevant amendments to the legislation were introduced in 1995. Along with the introduction of international bank supervision standards, a new law on Credit Institutions was adopted, and banks were subjected to international audit. As a consequence, the Bank of Latvia cancelled licences of 15 banks in 1995 and of additional seven banks in 1996. Four of the top ten banks, including the country’s largest bank, Banka Baltija, were closed.
Since its beginning in 1988, with the establishment of the first commercial banks, the banking system of Latvia has gone through two crises. The first crisis, in 1995, made the banking system to lose about 40 percent of its assets and liabilities, and was connected to the large reduction in the number of banks. The second crisis of 1998 was provoked by the Russian economic collapse. In 1999, Latvian banking sector overcame the negative influence of the Russian financial crisis, and 19 of 24 banks ended the financial year with profit. One bank decided on self-liquidation, another one went on bankruptcy. At the same period, in 1998, two new laws came into force — ‘On the Prevention of Legalisation of Money Received from Crime’, and ‘On Guarantees for Deposits of Natural Persons.’
In 2000, there were structural changes in some of the major banks of Latvia, due to the mergers the number of banks reduced from 24 to 22. The acceptance of the Law on Financial and Capital market Commission was the step to the stabilization of the Latvian banking system. 2001 was very successful year in the banking sector of Latvia. An essential event of that year was the introduction of the united supervision in Latvia, resulting in the Financial and Capital Market Commission uniting the Credit Institutions Supervision Department of the Banking in Latvia, Latvia Insurance Supervision Inspectorate and Securities Market Commission of Latvia.
The principle of banking secrecy is established in many countries, and Latvia is not exception. The Latvian Credit Institutions Law was recently amended with the rules of provision the information by the credit institutions to state institutions, state officials and other institutions. The amendments were also affected by the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime and on the Financing of Terrorism and developing court practice.
From February 2010, the credit institutions are obliged to give information on the existence of a bank account and transactions performed in the bank account to the State Revenue Service, upon their written request, if the tax payer does not file with the State Revenue Service the declarations or tax calculations, or does not make tax payments pursuant to the law requirements. For opening an account we recommend you to contact an agent at http://latviabankaccount.com/
