Latvijas Banka has started publishing a regular overview of the deposit rates offered by commercial banks. This is one of the measures taken to provide the customers of commercial banks with more comprehensive information on the services offered by commercial banks, thus facilitating competition and their possibilities of choosing a service provider offering more advantageous rates. Over the coming months, through the introduction of measures to boost lending, Latvijas Banka will continue implementing various activities, informing the public thereof.
The overview of the deposit rates offered by commercial banks is available at Deposit rates offered by credit institutions | Latvijas Banka and is updated on a weekly basis (on the first business day of the week).
The customers of commercial banks – households and non-financial corporations – can find in one place the following information on the deposit rates offered by commercial banks:
- time deposits for households;
- savings accounts for households;
- deposit rates for non-financial corporations.
A comparison detailing the deposit rates for households offered by commercial banks operating in all Baltic States is also available.
Latvijas Banka compiles data using the information published on the website of each credit institution and relating to their deposit rates.
For several years now, Latvijas Banka has consistently highlighted the issue of more active lending in the discussions with commercial banks, as it sees both the need and opportunity for commercial banks, especially the large commercial banks with a dominant position in the market, to contribute more to Latvia's economy.
The loans granted by commercial banks represent a significant component of a healthy economy – they are an important source of financing for firms to implement new business ideas and deliver investment. According to Latvijas Banka's calculations, a more sluggish mobilisation of funds has markedly slowed down corporate investment activity over the past 10 years and thereby also the economic growth rate. This has contributed to the economic gap between Latvia and the other Baltic States as well as hindered convergence towards the average income level of the European Union.
In late March, the involved institutions – the Ministry of Finance responsible for the sector and other ministries, Finance Latvia Association, commercial banks and Latvijas Banka – agreed on specific actions to strengthen the financial sector, ensure a larger contribution to the economy and boost lending. Financial policy implementers expect commercial banks to raise deposit rates in line with the increase in euro rates, lower the commission fees restricting competition and other costs incurred by customers as well as prepare for an improvement in lending when economic growth occurs.
Latvijas Banka has also outlined its "homework" on boosting lending, i.e. it is planned to review the lending regulatory framework regarded as too strict, the possibility of decreasing the amount of information to be provided by credit institutions in supervision matters will be evaluated, the analysis of the situation reflecting the availability of financing in Latvia and the causes of identified problems will be updated, etc.
"The reasons behind the weak lending activity can be found in the combination of many factors, and it is important for everyone to act accordingly in order to improve the situation rather than point the finger of blame at each other. Latvia cannot afford another business cycle without lending support," emphasises Mārtiņš Kazāks, Governor of Latvijas Banka.