Saeima committee okays merging FCMC with Bank of Latvia

RIGA - The Saeima Budget and Finance (Taxation) Committee today approved for the final reading in parliament draft amendments to the law on the Bank of Latvia providing for the Financial and Capital Market Commission's (FCMC) merger with the central bank.

Under the draft amendments, by October 31, 2020, the Cabinet of Ministers has to draft a bill setting out the central bank's management structure and functions. The draft legislation will also envisage merging the FCMC with the Bank of Latvia, ensuring the supervision of monetary policies and participants of the financial and capital market, as well as the independence of the financial supervisory authority.

The draft amendments also provide for reducing the Bank of Latvia Board from six members to four. 

The office term of the Bank of Latvia governor, his deputy and members of the Bank of Latvia Council would be limited to two consecutive five-year terms. 

The aforementioned legislation had to be agreed with the European Central Bank (ECB), which did not object to the amendments. However, then ECB head Mario Draghi said in a letter to Latvian lawmakers that the bill on the FCMC's merger with the Bank of Latvia, which will be drafted and submitted to Saeima by October 31, 2020, has yet to be approved by the ECB.