Flash Comment: Latvia - November 28, 2011
Latvijas Krājbanka to file for bankruptcy
- On November 24 the Bank of Lithuania revoked the Bank Snoras license and filed for its bankruptcy. Bank Snoras is the major owner of Latvijas Krājbanka (hereinafter – LKB) in Latvia. Latvian financial markets’ supervisor is to file for LKB bankruptcy this week. This is an isolated case of fraud by bank management. Deposit Guarantee reimbursements to LKB clients will begin on 29 November, 2011.
- LKB is not a systemically important bank and does not pose risk to the stability of the Latvian banking system. The overall impact of LKB bankruptcy on Latvian economic activity and GDP will be minor and contained.