The situation in the world economy in 2015 made the leading central banks reorganise their activity, strategy and monetary policy instruments, adjusting to life in the period of low interest rates. The accommodative monetary policy measures strengthened the euro area economy; however, credit institutions and other financial market participants still hold large amounts of liquidity that is not invested in the real economy, thus making it more difficult to achieve the medium-term price stability objective. This sets a new and important task for economic policy makers: to locate and with the help of structural reforms to eliminate the obstacles for the inflows of money into the economy. This is one of the most important common problems of the euro area, but every country has its own specifics and homework to be done.
Year 2015 was a special year for Latvia, which, for the first six months, was the presiding country of the EU Council. Specialists from Latvijas Banka also took an active part in this process. Experts of the central bank made an important contribution to the progress of the EU legal initiatives in the areas of payment services, financial services, financial market regulation, statistics and other areas, as well as ensured the representation of EU interests at the G20.
The lifeline of the financial system is the interbank payment systems, maintained and further developed by Latvijas Banka. As part of modernizing its electronic clearing system (EKS), Latvijas Banka supplemented EKS settlements with the so-called night clearing cycle in May 2015, enabling Latvia's credit institutions, EKS participants, to substantially speed up the transfer of customer payments submitted at the end of a business day. The upgrading of the existing payments infrastructure also continued with the goal of introducing the instant payment service in the EKS system in 2017; it will be a significant stimulus for the development of innovative payment instruments in Latvia.
Substantial upgrading took place also in other spheres of activity of Latvijas Banka, for instance, the functionality of the Credit Register was improved and the collection, aggregation and publication of various statistical data was developed further.
As reported before, Latvijas Banka's profit earned in 2015 was 30.04 million euro. Pursuant to the Law on Latvijas Banka, 65% or 19.52 million euro of Latvijas Banka's profit for 2015 will be appropriated to the state budget; the rest of the profit will be transferred to the reserve capital of Latvijas Banka.
Pursuant to the Law on Latvijas Banka, Latvijas Banka's annual financial statements are audited by independent external auditors recommended by the Governing Council of the European Central Bank and approved by the Council of the European Union. Latvijas Banka has received a positive auditors' opinion on its financial statements for 2015 from the auditing company SIA "KPMG Baltics".
The Annual Report of Latvijas Banka for 2015 will be available at www.bank.lv. Financial statements of Latvijas Banka for 2015 also will be published separately on the web site of Latvijas Banka.
Latvijas Banka is the central bank of Latvia - an independent institution and a member of the Eurosystem. The primary objective of Latvijas Banka is the same as that of the central banks of other euro area countries and the European Central Bank – price stability (inflation rates below, but close to, 2% over the medium term). This is an essential precondition for a strong and growth-oriented economy. To achieve that, Latvijas Banka participates in the formulation of the Eurosystem's monetary policy, related decision-making and implementation.
Furthermore, acting in the public and economic interests, Latvijas Banka carries out the following main tasks within the Eurosystem:
– manages foreign reserves;
– issues cash in Latvia and participates in ensuring the cash circulation process in the euro area;
– promotes smooth operation of the payment systems;
– compiles financial and monetary statistics, as well as balance of payments statistics;
– maintains and develops the Credit Register.
Latvijas Banka promotes analysis and research of macroeconomic and financial issues, thereby laying a secure foundation for professional activities in these areas. The role of the leading industry expert helps Latvijas Banka enhance the public understanding of the fundamentals of the economy and the monetary system, the current situation and the implemented monetary policy.