Madam, - On February 21st it was claimed in an article published in your esteemed newspaper that Italian organised crime had devised a scheme to acquire banking institutions in Latvia. I want to make it very clear that for persons who are not fit and proper it is impossible to acquire a qualified holding in any financial institution of the Republic of Latvia.
Latvia is a member of the EU since May 2004, and since 1995 we have been working on the transposition of the relevant provisions of the EU Consolidated Banking Directive into Latvian law. The Financial and Capital Markets Commission (FCMC), which is a consolidated financial sector regulator operating since 2001, has supplemented the legal requirements with more detailed guidelines, based on best international practice, such as the FATF 40 recommendations to combat money-laundering and terrorist financing.
According to legal requirements, qualifying holdings in Latvian banks may only be acquired by persons of impeccable reputation who are fit and proper, financially stable, and can demonstrate that their wealth is obtained by legal means. In cases where the qualifying holding is acquired by a legal person, the FCMC verifies the identities of actual beneficiaries - natural persons.
To ensure transparency of the market, the information regarding persons having a qualifying holding in Latvian banks is publicly available on the home of the FCMC at www.fktk.lv.
These high standards have ensured that the market is dominated by West European banking groups, such as Nordea, SEB, Swedbank, Nord/LB, HVB Bank and Sampo. Foreign ownership has also facilitated efficiency and universal access to financial services. For instance, the average interest of newly-issued mortgage (housing) loans has reached 5.72 per cent by the end of 2004. Our experience has shown that high supervisory standards and extensive regulation act as a catalyst, not as a hurdle to market development. - Yours, etc.
ULDIS CÉRPS, Chairman, Financial and Capital Markets Commission, Kungu Iela 1, Riga, Latvia.