Press Release of January 13, 2000



At its regular meeting on January 13, 2000, the Council of the Bank of Latvia made amendments to the "Regulation for Calculation of Credit Institutions Performance Indicators" (effective as of 31.01.2000) on the basis of the "Regulations for Consolidated Supervision of Banks" as adopted by the Bank of Latvia, and the European Union (EU) Directive No. 92/121/EEC "On Monitoring and Controlling of Large Exposures of Credit Institutions". Said Directive provides for a possibility not to impose any restrictions on exposures where such transactions are conducted between a credit institution and its subsidiaries, parent undertaking, or subsidiaries of its parent undertaking that are credit institutions, financial institutions (except insurance companies) or ancillary banking undertakings and whose financial statements are consolidated for supervision purposes. In view of the tendency in the banking sector to delegate the provision of certain financial services, such as leasing, to subsidiaries, the removal of the above restrictions will promote the development of similar structures.

The Regulations stipulate that credit institutions must receive Bank of Latvia's approval for non-restriction of said exposures. Thus the Bank of Latvia will decide this issue on a case-by-case basis. Prior to allowing a credit institution to benefit from the above exemption, the Bank of Latvia will make sure that the banking group in question is transparent and its efficient consolidated supervision is possible.