The Council of Latvijas Banka has made a decision to ease the requirements for systemically important credit institutions. The central bank conducts an annual assessment to determine which credit institutions can be identified and recognised as other systemically important institutions[1] (hereinafter "O-SII"). An O-SII capital buffer rate is set for credit institutions recognised as O-SIIs. Its amount depends on the systemic importance of each credit institution.
On 15 December 2025, Latvijas Banka recognised Swedbank Baltics AS, Swedbank AS, AS SEB Banka, and AS Citadele Banka as O-SIIs.
Thus, compared to the 2024 assessment[2], AS Rietumu Banka and BluOr Bank AS are no longer identified and recognised as O-SIIs. Accordingly, the O-SII capital buffer rate is not set for them either.
Requirements for systemically important credit institutions have been eased, since Latvijas Banka reviewed the method for identifying and recognising O-SIIs in 2025. Until now, the O-SII identification methodology[3] suggested by the European Banking Authority (EBA) was used. This year, Latvijas Banka improved the method to better suit countries with a financial sector relatively smaller than the average in the European Union (EU) and to reduce the role of some systemically insignificant financial transactions by credit institutions, which, in the case of a small financial sector, can have a disproportionally large impact on the results of the systemic importance assessment.
Improving the method for identifying and recognising O-SIIs provides an opportunity to:
- better align the practical implementation of the EU regulatory framework with the conditions characteristic of the Latvian financial system;
- identify and recognise as O-SIIs only those credit institutions that are systemically important to the Latvian economy;
- simplify banking regulation where possible, while preserving the overall resilience of the financial system and providing additional potential for a broader application of the principle of proportionality in the supervision and resolution of financial market participants.
In 2025, Latvijas Banka also changed the method for setting the O-SII capital buffer rate, transitioning from the model of equal expected impact to an interval approach. Most other EU countries have adopted this relatively simpler approach, and it offers greater transparency and comparability between EU countries.
Considering the changes in the relative systemic importance of credit institutions, as well as the change in the method for setting the O-SII capital buffer rate, AS SEB Banka and AS Citadele Banka will henceforth have a 0.25 percentage point lower O-SII capital buffer rate, standing at 1.50% and 1.25% respectively, while Swedbank Baltics AS and Swedbank AS will maintain the current 2.0% of the total risk exposure amount.
The new requirements will come into effect on 22 December 2025.
The methodology revised in 2025 and more detailed information on the current assessment will be published in the near future on the website of Latvijas Banka.
[1] As opposed to global systemically important institutions (G-SIIs).
[2] Various notices, 12.12.2024 – Latvijas Vēstnesis.
[3]EBA Guidelines (EBA/GL/2014/10) of 16 December 2014 on the criteria to determine the conditions of application of Article 131(3) of Directive 2013/36/EU (CRD) in relation to the assessment of other systemically important institutions (O-SIIs).