RIGA, July 2 (Xinhua) -- The share of foreign money in Latvian banks had dropped to 20 percent at the end of last year, according to a report released by the Baltic country's banking regulator on Tuesday.
Commercial banks still remain the largest segment of the Latvian financial and capital market by assets, but their share has been decreasing as the regulator has been following a strict risk-reducing approach to bank supervision already since 2016, the Financial and Capital Market Commission (FCMC) says in its report.
The Latvian banking sector kept contracting also in 2018, with the share of its assets in the entire financial sector declining to 79 percent from 84 percent in 2017, the regulator informed.
The Latvian banks' future is an entirely different client profile, which is why we no longer divide the banks into those serving domestic clients and those catering to foreign clients, because now they all focus primarily on the Latvian market and then on the European Economic Area and the Organization for Economic Cooperation and Development (OECD) member states, the FCMC said.
Last summer, all Latvian banks stopped servicing the so-called shell corporations in a matter of months, as such business is now banned in Latvia.
Around 10 billion euros (11.3 billion U.S. dollars) have flow away from the Latvian financial sector in the past three years, but we have significantly reduced the business of risky transactions and freed our financial system and also country of unnecessary reputational risks, the regulator indicated.
With domestic and EU money now dominating Latvia's bank deposits, the share of these deposits has grown to 91 percent, according to the regulator's report.
