Latvia's Trasta Komercbanka loses licence over alleged money laundering

By bne IntelliNews March 4, 2016

The European Central Bank has pulled the license of Latvia’s Trasta Komercbanka on the request of the Latvian financial market regulator FKTK.

The move on March 3 likely spells the end for the beleaguered lender, on which withdrawal limits were imposed in late January by the FKTK, after the bank failed to take action on improving its capital base and proving that it had not been involved in money-laundering.

Money laundering has long been a problem of the Latvian banking sector. Latvian banks are a popular haven for non-resident deposits (NRDs), mostly stemming from Russia, Ukraine and other CIS countries. 

The regulator said a decision would follow on access to deposits in Trasta, as well as information on the procedure and timeframe for disbursement of guaranteed compensation. Deposits of up to €100,000 are guaranteed by the state and 93% of depositors will recover their money, the FKTK said.

Trasta Komercbanka is not important enough for the Latvian banking system to undergo resolution action or bailout, the FKTK said in a statement.

“The bank provides no critical functions, and is not a systemically important bank. In the case where the bank quits the market, it will not have adverse effects on financial stability,” the FKTK stated.

FKTK has been under fire recently in Latvia and internationally for alleged inefficiency in curbing money laundering in the Latvian banking system. The criticism led the regulator’s head Kristaps Zakulis to step down in late January, to be replaced with deputy Peter Putnins. The action to pull Trasta’s license may improve Putnins‘ standing with the Latvian government, after he was assessed by a leading minister as not fit for the task of making FKTK more effective.

 

 

 

 

 

 

 

 

 

 

Related Articles

Lithuania calls for further committments from Gazprom to end EU anti-trust case

Gazprom’s commitments to lessen the impact of its dominant position as a supplier of gas to Lithuania and other CEE countries are not sufficient and the European Commission should ensure they are ... more

Russia offers Latvian port a slice of the Nord Stream pie

The Latvian port of Ventspils has been asked to store and handle delivery of pipes for Nord Stream 2, the controversial Russian gas pipeline project, the chairman of the port said on April 20. The ... more

Latvia opens its gas market as it seizes control from Russia

The Latvian gas market opened up to liberalisation on April 3 following entry into force of a number of legal changes. Riga has fought hard to end control of the gas transmission and storage ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss