Latvia's troubled ABLV Bank seeks further assistance from central bank

Source: Xinhua| 2018-02-22 03:06:04|Editor: huaxia
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RIGA, Feb. 21 (Xinhua) - Latvia's troubled ABLV Bank, whose payments have been suspended following a U.S. report implicating the bank in money laundering schemes and bribery, has asked the Bank of Latvia for another extraordinary loan, the Baltic country's public media reported on Wednesday.

The Bank of Latvia, which on Monday already granted a 97.5 million euros loan to steady ABLV Bank's operations, might continue to provide assistance to the commercial bank if such support is approved by the financial regulator, the Financial and Capital Market Commission (FCMS) and the European Central Bank (ECB) as ABLV's direct supervisor.

To secure the loan, ABLV Bank has offered more of its highly liquid securities as collateral. The Bank of Latvia is currently analyzing the proposed deal. The size of the possible loan has not been disclosed.

Representatives of the Latvian central bank said that the decision on ABLV Bank's request might be announced on Thursday.

ABLV Bank's spokesman Janis Bunte indicated that ABLV is not asking for just another loan but wants to borrow up to 480 million euros in installments against a pledge of securities.

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 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.

When the news of the U.S. report broke last Wednesday, clients rushed to withdraw their money from ABLV Bank. To curb the outflow of funds and in compliance with the ECB's instructions, the Latvian banking regulator last Sunday suspended ABLV Bank's client payments in all currencies.By that time, clients had withdrawn around 600 million euros from the bank.

ABLV Bank has drawn up a stabilization plan, which today was submitted to the regulator. The plan provides for selling part of the bank's securities portfolio, which currently is worth an estimated 1.5 billion euros. (1 euro = 1.23 U.S. dollars) Enditem