Latvia's troubled ABLV Bank gets nearly 100mln euro loan from central bank

Source: Xinhua| 2018-02-19 20:43:29|Editor: huaxia
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RIGA, Feb. 19 (Xinhua) -- Latvia's ABLV Bank, which U.S. authorities accused of involvement in money laundering schemes and bribery, has secured a 97.5-million-euro loan from the Bank of Latvia to stabilize its operations, according to the central bank on Monday.

"Taking into consideration ABLV Bank's request and the supporting position of the banking regulator, the Financial and Capital Market Commission (FCMC), the Bank of Latvia Council has decided to grant ABLV Bank a loan of 97.5 million euros against a pledge of safe, highly liquid securities," the central bank said in a statement.

The Bank of Latvia emphasized that no budget money is being used in this business transaction and that the value of the securities pledged by ABLV is significantly higher than that of the loan.

Earlier on Monday, ABLV representatives said the bank would seek a loan of up to 480 million euros from the Bank of Latvia after its client payments have been suspended.

ABLV Bank said it would pledge its liquid securities to receive the loan, which is needed to stabilize the bank.

"The bank's asset structure is balanced, but given the current situation, transferring and selling assets can take longer time than usually," the bank's representatives said.

At the end of last year, ABLV Bank had nearly 1.7 billion worth of liquid securities at its disposal.

Complying with the European Central Bank's (ECB) instructions, the Latvian banking regulator, FCMC, on Sunday suspended ABLV Bank's client payments in all currencies.

"This is the ECB decision, and we have adopted it based on the ECB's instructions. The main task of the financial supervisory authorities is stability in the sector as a whole... We will continue to take the necessary supervisory actions in cooperation with the ECB," said FCMC head Peters Putnins.

In a report released last week, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) said that the ABLV management "used bribery to influence Latvian officials when challenging enforcement actions and perceived threats to their high-risk business".

FinCEN has proposed sanctioning ABLV for its money laundering schemes by banning the bank from opening or maintaining correspondent accounts in the U.S. or altogether blocking the bank from the U.S. financial system. Enditem