It is not so, said Alina Jurane, Rigas Komercbanka spokeswoman. Figures don't lie, but interpretations differ, she said.
"The Bank of Latvia by its requirements arrives at their prognosis and we have our interpretation of the same figures," Jurane said Nov. 9. "None of us knows the percent of money lost. That is why our analysis is different."
Described by Baltic News Service as "not practicing due circumspection," and other media as reporting "bold" amounts as reserves, nine banks under reported investments in Russia or the effects of them.
Bank of Latvia spokesman Edzus Vejins issued a warning that depositors compare capital and reserves on the latest report with the preceding report when making deposits in Latvian banks.
The Bank of Latvia released the names of nine banks whose capital may be less than they reported. The list starts with the second through fourth biggest in terms of assets: Latvijas Unibanka, with reserves and capital of 32.06 million lats ($55.6 million), Rietumu banka, Rigas Komercbanka, and Baltijas Tranzitu Banka. It continues with Saules Banka, Latvijas Krajbanka, Trasta Komercbanka, Lateko Banka and Multibanka, the smallest of the nine with 2.4 million lats in capital and reserves.
The Bank of Latvia has demanded that Unibanka present a detailed report about its reserves no later than Friday, Nov. 13. Parekss banka, with reserves and capital of about 40 million lats, was not included.
The banks are starred to indicate lack of caution in considering their Russian involvement on a list of 23 banks approved to accept deposits from private individuals.
Capital and reserve reports submitted to the central bank and published in the official newspaper Latvijas Vestnesis are used in determining which banks can accept deposits from people. Caution and accuracy are especially important on the Nov. 1 report, said Vejins, because some Latvian banks capital and reserves could depend on the luck of the draw on Nov. 17. That's when Russia may announce additional plans for negotiating foreign debts.
Russia said on Nov. 5 that it will not pay foreign debts next year and will seek to renegotiate loans. It is also not known which Russian banks the central bank of Russia will select for survival, and which it will allow to fail.
Latvian banks with investments in these banks could be hurt if creditor banks get the death blow from the central bank of Russia. Another possibility against which Latvian banks need to be armed with ample capital and reserves is the possibility that Russia will not receive the next $4.3 billion payment from the International Monetary Fund. The IMF promised a $22.6 billion bailout package in July.
According to Reuters News Service, Deputy Secretary of State Strobe Talbott told the World Affairs Council Nov. 5 in Los Angeles that the United States will not back the loan if Russia repeats past mistakes and massive amounts of rubles come off its printing presses.
Russia has said its measures include tax breaks for industry and financing for the state bank through printing more money. On Nov. 5, IMF representatives left Moscow without an agreement on the next installment of the July loan amount.
Latvian banks began to cut back employees in October. The state employment service unofficial figures show layoffs not only at Kapitalbanka, which has closed, but also at Latvia's forth largest bank, Rigas Komercbanka, and also at the savings bank Latvijas Krajbanka, which reduced the number employees in Riga and dismissed 31 employees at its Daugavpils branch.
Jurane said that Rigas Komercbanka has made a staff reduction of 10 percent, about 90 employees, including some administrators, partly because of an efficiency study undertaken in March that indicates the need for fewer employees, but that the current economy has also cut into bank jobs.