Latvian financial watchdog announces scrutiny of boutique banks

By bne IntelliNews February 2, 2016

Latvia’s much criticised financial regulator FKTK announced on February 2 that it will launch an audit of the country’s boutique banks to check money-laundering standards are up to scratch.

The audit was announced by deputy head of FKTK Peter Putnins, who was recently proposed by the Bank of Latvia and the finance ministry to become the new head of the regulator. He would replace Kristaps Zakulis who stepped down in late January amidst allegations FKTK was ineffective in fighting money-laundering and corruption in Latvia’s banking sector, which is a longstanding issue.

Latvian banks are a popular haven for non-resident deposits (NRDs), mostly stemming from Russia, Ukraine and other CIS countries. Funds from the CIS make up around half of all deposits the system. Despite warnings from international institutions such as the OECD, Latvia's role as a money-laundering hub has been exacerbated by the ineffectiveness of FKTK, according to critics.

Putnins now pledges to step up efforts to fix the problems. He told Latvian Radio that all the country's 17 boutique banks – which are thought to be at the centre of money-laundering allegations - will undergo a stringent audit in line with US and EU practices and carried out by three reputable US companies, LSM reports.

"That will take us to the highest international standards possible. Banks and bank owners have to understand and implement checks and standards... that's important not only for themselves but for wider national interests," Putnins said.

Putnins’ announcement looks likely to be a response to critcism of his nomination to head FKTK. Economics Minister Dana Reizniece-Ozola, speculated to become finance minister in the new government, expressed doubt that Putnins will be able to make the necessary changes at the watchdog.

Related Articles

Latvia issues permits to new gas infrastructure holding

The Latvian Public Utilities Commission (SPRK) announced on January 5 that it has issued licences to Conexus Baltic Grid for the transmission and storage of gas. Conexus Baltic Grid will control ... more

Latvijas Gaze agrees to set up spin-off company to operate gas grid and storage

A shareholders' meeting at Latvijas Gaze (LG) decided on December 22 to set up a company that will be used to spin off the country's gas pipelines and storage facilities. The creation of Conexus ... more

Latvia fines Swedbank for failings in anti money laundering measures

The Latvian branch of the Swedish banking group Swedbank said on November 23 it will implement measures to curb money laundering. The pledge follows an audit and a fine of €1.36mn from the ... 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