Government set to decide in principle on merging FCMC with Bank of Latvia

  • 2020-05-25
  • LETA/TBT Staff

RIGA - The government is set to decide in principle on merging the Bank of Latvia and the Financial and Capital Market Commission (FCMC) tomorrow, Prime Minister Krisjanis Karins (New Unity) told journalists following the weekly coalition meeting. 

The prime minister said that the two institutions support the merger.

"We will look how to use resources more effectively and ensure a better supervision of banks and the spine of the economy in general," the premier said.

MP Ilze Indriksone (National Alliance) said that politicians are determined to assess the plan to merge the two institutions' functions, preserving at the same time some independence in decision making. "Hopefully, the decision will ensure a development of the financing market, not only control," the lawmaker said. 

MP Gatis Eglitis (New Conservative Party) indicated that the merger plan will be debated by the Saeima Budget and Finance (Taxation) Committee, adding that the parliamentary committee is likely to voice both objections and questions. "For instance, whether the existing Bank of Latvia governor has sufficient competence to supervise the banking sector," Eglitis said.

Asked if the institution that will be created as a result of the merger could get a new administration, Karins said that this is not being planned, especially because both the Bank of Latvia and the FCMC have heads who have been recently appointed with an overwhelming majority of votes. The question is about the distribution of functions and areas of responsibility, the premier explained. 

As Finance Minister Janis Reirs (New Unity) told LETA earlier merging the FCMC with the Bank of Latvia would be a logical conclusion of the financial sector's overhaul.

The Finance Ministry together with the Bank of Latvia and the FCMC has drawn up an assessment of the plan to merge the FCMC with the Bank of Latvia. The Cabinet of Ministers is expected to review the assessment at the weekly meeting this Tuesday.

The Finance Ministry indicated that the benefit-risk evaluation shows that merging the FCMC with the Bank of Latvia would make sense because it would result in public benefit. The risks identified in the benefit-risk evaluation assessment process are manageable by taking the necessary risk reducing measures, including an adequate distribution of duties, rights and responsibilities.