The Latvian financial market regulator FKTK has approved the self-liquidation of ABLV, the third largest Latvian bank that is closing down over allegations of money laundering, FKTK said on June 12.
The US Financial Crimes Enforcement Network (FinCEN) alleged in February that ABLV was an active money launderer with some of its activities also linked to North Korea’s missile programme. ABLV claimed the allegations were unfounded.
Still, as FinCEN’s damning assessment of ABLV came out, a run on the bank’s deposits began and the European Central Bank (ECB) said ABLV was “failing or likely to fail.” That sealed the Latvian bank’s fate, causing questions about the credibility of the Latvian banking system, as well as on the supervision powers of the ECB, to resurface.
“We believe that … the controlled self-imposed liquidation will ensure the further involvement of the FKTK,” the regulator said in a statement.
It added that the self-liquidation would ensure “the protection of Bank's assets and control over the payable amount in order to prevent any money laundering during the process.”
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