Latvian central bank governor denies bribery allegations

Design for Latvia’s Museum of Contemporary Art. Image Adjaye Associates  AB3D

Design for Latvia’s Museum of Contemporary Art. Image Adjaye Associates  AB3D

Latvia's troubled ABLV Bank, which US authorities accused of involvement in money laundering schemes and bribery, is likely to be liquidated as the European Central Bank has determined that the bank is failing or likely to fail, the Baltic country's financial regulator said Saturday.

"Following the decision by the European Central Bank to declare ABLV Bank, AS and its subsidiary ABLV Bank Luxembourg "failing or likely to fail", the Single Resolution Board has decided that resolution action is not necessary as it is not in the public interest for these banks", it said.

ABLV was plunged into crisis after the US Treasury Department this month proposed to ban it from the American financial system, saying it helped process illicit transactions, including for entities with alleged ties to North Korea's ballistic missile program.

The bank said the allegations are politically motivated. But he did not provide any further details or comment on the ABLV case.

The private sector bank's CEO Ernest Bernis for his part told reporters yesterday that ABLV had sold a good chunk of its securities portfolio and was now ready for the payment freeze to be lifted.

The eurozone member's longtime governor, who was appointed in 2001 and also sits on the European Central Bank governing council, was detained last weekend by the Corruption Prevention Bureau (KNAB) and accused of having solicited and received a bribe of at least €100,000 (RM481,500).

More news: EOG Resources Inc (EOG) Shares Sold by Suntrust Banks Inc
More news: Taliban Kills at Least 18 Afghani Soldiers during Assault on Military Base
More news: The language of 'Black Panther'? It's real

That refers to a bank's significance and whether its problems could spill over to affect others.

"As a effect, the winding up of the banks will take place under the law of Latvia and Luxembourg, respectively", the SRB said in a statement.

"The bank did not have sufficient funds which are immediately available to withstand stressed outflows of deposits before the payout procedure of the Latvian deposit guarantee fund starts", the ECB added.

The bank said its liquidation may be started "in the nearest future" and that "the amount of its assets is sufficient to satisfy demands of all clients and creditors". Customers can contact the bank directly or the FCMC which is the administrator for the Latvian deposit guarantee fund, " the ECB points out.

The episode is Latvia's biggest financial difficulty in a decade.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.