RIGA - Assets in Latvia's banking system shrunk 3.9 percent, or 450 million euros, in March to 12 billion euros, signifying an acceleration of the trend in the first two months of the year when the government announced that regulators and law enforcement agencies needed to crack down on money laundering schemes.
According to data from SEB Unibanka, Latvia's banking assets accounted for 39.5 percent of overall Baltic bank assets, down from 40 percent in February, while Lithuanian banking assets accounted for 29 percent (29.5 pct in February) and Estonia's 31.6 percent (30.5 pct in February).
Aggregate assets in Baltic banks grew 8.8 percent to 30.5 billion euros over the first quarter, SEB Unibanka said. In March alone, assets increased by 5.3 percent, or 1.55 billion euros.
The data fails to take into account April figures, which will reflect reactions to the U.S. Treasury Department's blacklisting of two Latvian banks. The department announced that Multibanka and VEF Banka, in the words of one U.S. official, "represented a danger to the international community because they facilitated the placement and movement of dirty money."
Historically Latvia's banking system, which numbers 22 locally based financial institutions and one foreign branch, has had a reputation of having lax rules for companies wanting to move money, though recently the government has come under pressure to crack down on the suspicious transactions.