RIGA - Saeima today supported in the second reading merging the Financial and Capital Market Commission (FCMC) with the Bank of Latvia.
Saeima approved the new Law on the Bank of Latvia and most of the bills accompanying the law in the second reading today.
The new Law on the Bank of Latvia determines the central bank's management structure and operations after FCMC is merged with the central bank in order to ensure independence of the FCMC functions.
Bank of Latvia Governor Martins Kazaks previously told Saeiema members that the merger would produce several benefits, including more efficient measures for financial stability, reduced systemic risks, a broader look at changes on the financial and capital market, and more effective actions at a times of crisis.
In addition, administrative overheads will decrease and the cost of personnel, financial and technical maintenance will also decrease, said Kazaks.
The new Bank of Latvia Law defines the principles of the central bank's operations, management structure, financial matters, and the central bank's role in implementing macro-prudential policies.
The new law also lays down the Bank of Latvia's competences and legal instruments for regulation and supervision of the financial market, requirements for the central bank's statistics, and others.
The current Law on the Bank of Latvia was adopted in 1992, while the new version of the law is to come into force on January 1, 2023.
On February 26 this year, the proposed changes to the Law on the Bank of Latvia were supported by the European Central Bank.
Saeima will review the draft Bank of Latvia Law in three readings.