BB was the largest commercial bank in Latvia until it suddenly went belly up in early 1990s, robbing thousands of people of their savings which they had deposited with the bank in hope of high interest rates.
"The bankruptcy of BB had a bad influence on the economy and the banking system," Economics Minister Aivars Kalvitis said through his assistant Evita Timofejeva.
Head of the Monetary Policy Department in Latvia's Central Bank, Helmuts Ancans, said BB's bankruptcy had two effects on Latvian economy - one direct and one indirect.
"The direct effect was that it was a major bank in Latvia. The bank was the leading bank in lending. In 1995 the bank's total assets equaled 10 percent of GDP. It was, of course, a big loss for the economy," An-cans said.
Still, the direct effect was merely a loss of money which Latvia has regained as of today. It was the side effect of losing money that really hurt Latvia's banking system.
"The indirect effect was a decrease of trust in banks resulting in a decrease in liquidity which pushed up the corporate rates. Latvia has fully recovered by now, and we see an increase in long- term deposits," Ancans said.
Peda called for 13 years in prison and property forfeiture for supervisory board chairman Aleksandrs La-vents, nine years in prison and property forfeiture for the bank's former president, Talis Freimanis, as well as six years in prison and property forfeiture for the bank's investments specialist Alvis Lidums. Moreover, the prosecutor also wants the court to ban the defendants from engaging in any kind of business for five years.
Leonards Pavils, spokesman for the Justice Ministry, said the ministry had no comments on the criminal case against the Banka Baltija.
"In a free democracy the Justice Ministry cannot interfere in court proceedings," Pavils said.
The prosecutor told BNS that the sentence in the BB case will be decisive for the way in which the world will look upon Latvia in future - either as a country where one can embezzle huge amounts of money, mock the investigation and the court and remain unpunished or as a country where criminals receive the deserved punishment.
"The economics minister trusts the court's decision to be the right one," Timo-fejeva said.
Dzintra Subrovska, spokes-woman for the Prosecutor General's Office, said BB attracted people with extremely high interest rates.
"The first people who went back to take their money out received this interest," Subrovska said. "The bank spent money in many different ways. For example, the owners of the bank moved money to their own companies and a lot of people lost everything. Not only physical persons but companies as well. It is the biggest scandal in independent Latvia maybe."
The fall of BB attracted a lot of political attention. One that took it close to heart was former Interior Minister Janis Adamsons. He met several times with the Prosecutor General Janis Skrastins to discuss bank issues in Latvia including the BB case.
"MP Janis Adamsons protected Lavents.He begged the previous prosecutor general, Janis Skrastins, not to arrest Lavents. 'He will fix it, he will pay back the money, he is an honest man,' Adamsons said. The prosecutor waited for a few months but then thought Lavents would leave the country so he had him arrested," Subrovska said.
Adamsons has now become famous for his statements on various topics in Latvian politics. His bread and butter with media is saying that he is sitting on evidence in pedophilia scandals against other members of parliament and other top officials in society. Still, he denied that he tried to get Lavents off the hook.
"We were talking about almost every serious criminal case and there was a state commission summoned for the BB case," Adamsons said. "The investigation started with some of the employees in BB who were involved in dealing with weapons, drugs, illegal sale of alcohol and ordering murders. Nothing came out of this case and I don't know where it is today."
Adamsons said that in 1994, when he was the interior minister, there were 75 different banks in Latvia, 35 court cases involving banks and 10 banks in a really bad situation.
"The Banka Baltija was one of them in a not so good situation. Comparing the statistics we realized that BB could not go through the audit so we started a fast examination in January 1995," Adamsons said.
When it was clear to Adamsons that it would be a bank crisis in Latvia he put police surveillance on La-vents.
"For two reasons. Without guards he could have ended up in serious problems, and the police did everything they could to prevent La-vents from leaving the country," Adamsons said.
According to Adamsons, the banking situation in Latvia has changed today. Latvia stands on a quite solid banking system impossible to ruin.
"There are many important aspects to be considered about BB. Still, in general, the Latvian banking system has had a lot of help from abroad. Those banks who went bankrupt have come back and are stable now," Adamsons said.
People are not holding their breaths over the outcome of the BB trial except maybe for prosecutor Peda. The banking system in Latvia is showing a noticeable improvement compared to the wild days back in the mid- 90s. The days when people were offered tremendous interest rates on their savings are over now.