Latvian authorities will meet today to discuss how to increase financial supervision following this week’s failure of ABLV Bank, the country’s third-largest lender.
Principally dealing with foreign markets and deposits, ABLV was recently accused by US officials of aiding the breach of North Korean sanctions, money laundering and bribery. The threat of further action against the bank led to depositors withdrawing more than $7 million, nearly a quarter of its total deposits, in the span of days.
Last year, two other Latvian banks were also fined more than $3 million for permitting clients to violate UN sanctions against North Korea. Additionally, other European banks such as those in Cyprus have been accused of illegally breaching humanitarian sanctions against Russia.
It is unclear what steps the country’s officials plan to take in order to reassure investors and increase oversight. Expect strict supervision of Latvia’s other lenders as this month’s breach rekindled worries of corruption across the financial sector, an outlook which threatens to further destabilise the Baltic nation.
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Taylor provides insight into trade and technology, with a particular focus on North America and the Asia Pacific. He also serves as a copy editor on The Daily Brief.