Latvijas Banka represents the Republic of Latvia in a number of international financial institutions and works with foreign central banks. Latvijas Banka also participates in the operations of other international financial and credit organisations where this is consistent with its objectives and tasks.

 

In 2024, Latvijas Banka continued to represent Latvia's interests at the meetings of the IMF Board of Governors and participated in coordinating IMF operational issues.

  • Despite successive shocks, global growth remains resilient, with inflation continuing to decline, according to IMF forecasts, although the medium-term growth outlook remains weak. Therefore, the IMF urged policy makers to promote productivity growth and the mobilisation of domestic resources (including tax revenues), particularly in light of high debt levels and increasing expenditure needs, such as those related to security and an ageing population. The IMF also stressed the need to maintain free trade, address climate change, and harness the benefits of the transition to a green economy and digitalisation, while mitigating the associated risks.
  • In 2024, the IMF reduced borrowing costs for its Member States, including by lowering long-term borrowing premia, while maintaining its financial capacity and buffers. The financing framework of the Poverty Reduction and Growth Trust1This trust is the IMF's main instrument that provides funding to low-income countries. The loans granted by this trust, which are much cheaper than market financing, support economic programmes that help attract additional funding from other institutions and the private sector.
     was also revised to ensure its sustainability by supporting low-income countries.
  • In 2024, the IMF and the World Bank celebrated the 80th anniversary of the establishment of the Bretton Woods institutions. During the reporting year, Liechtenstein joined the IMF, bringing the number of Member States to 191. The Member States also re-appointed Kristalina Georgieva as Managing Director of the IMF for a second five-year term. In 2024, the IMF provided 41.2 billion US dollars in financial assistance to 15 countries around the world.

Latvia's interests in the IMF are represented through the Nordic-Baltic Constituency, which consists of Denmark, Estonia, Iceland, Latvia, Lithuania, Norway, Finland, and Sweden. One Executive Director represented this constituency on the IMF Executive Board with a total of 3.3% of the votes in 2024. Since January 2023, Vitas Vasiliauskas, from Lithuania, has been the Executive Director of the Nordic-Baltic Constituency, representing the Baltic States. In 2024, the central banks of the Baltic States continued to coordinate the cooperation between the central banks and Ministries of Finance of all the Nordic and Baltic countries on IMF issues, and to draft joint positions on items to be considered by the IMF Executive Board.

In 2024, Latvijas Banka continued to coordinate the involvement of the Latvian institutions in the IMF within the framework of its surveillance mandate or the Article IV Consultation. The annual IMF report containing recommendations was published in September.

Furthermore, Latvijas Banka continued its membership in the BIS in 2024. Latvijas Banka actively participated in the work of the BIS Innovation Network, and in the work of the Eurosystem Innovation Forum (Innov8).

Additionally, Latvijas Banka continued to work with, exchange information with, and represent Latvia's interests in:

  • the European Forum of Deposit Insurers;
  • MONEYVAL;
  • the Group of Banking Supervisors from Central and Eastern European Countries;
  • the OECD;
  • IOSCO;
  • IAIS. 

In February 2024, Latvijas Banka became a permanent member of the IOPS.

In addition to working in various EU and international institutions and organisations, Latvijas Banka also cooperated with the supervisory authorities, protection systems or guarantee funds, and resolution authorities of other countries under bilateral cooperation and information exchange agreements. Cooperation with supervisory and resolution colleges also played an important role in experience and information exchanges.

As is traditional, Latvijas Banka continued to maintain particularly close cooperation with the institutions of other countries through Nordic-Baltic cooperation forums, including by holding the presidency of the Macroprudential Forum of the Nordic and Baltic countries.

Latvijas Banka also continued active daily cooperation within the Baltic region, where similar challenges are often faced in the areas central banks are responsible for, and worked with colleagues from the central banks of Lithuania and Estonia by exchanging experience in issues concerning the availability of critical financial services, resolution, depositor protection, and other related matters.

In 2024, Latvijas Banka continued to actively share its experience on issues concerning the supervision of AML/CFTP with central banks and supervisory authorities, including through cooperation with partners from France, Cyprus, and the Isle of Man. In 2024, Latvijas Banka cooperated more closely with the Estonian competent authorities on the supervision of crypto-asset service providers; with the central banks of Slovakia and Slovenia on the inclusion of sustainability aspects in macroprudential supervision, and with the central bank of Australia on processes related to the provision of cash.

In its bilateral cooperation, Latvijas Banka provided support to:

  • Armenia on the regulation of outsourcing services for credit institutions in Latvia;
  • Moldova in the regulatory approach to the supervision of large exposures;
  • Ukraine, advising its central bank on risk management, strategic management, financial sector supervision, central bank capital management, and payment system issues;
  • Uzbekistan, sharing its experience in data management.

In 2024, within the framework of academic cooperation, Latvijas Banka began to expand the cooperation of its experts with the IMF's Vienna Institute, including, within the framework of its training programmes, experts from Latvijas Banka contributed to enhancing the teaching capacity, focusing on issues related to economic growth and competitiveness, and sharing Latvia’s experience in integrating sustainability aspects into macroprudential supervision.

Latvijas Banka in the Eurosystem and European Union institutions

Latvijas Banka as a member of the ESCB and the Eurosystem complies in its activities with the legislation of the Republic of Latvia and the EU, including the ECB legal acts, in accordance with the Treaty on the Functioning of the European Union and the Statute of the ESCB and of the ECB.

In 2024, the Governor of Latvijas Banka participated in the work of the Governing Council and the General Council of the ECB, closely involved in setting the monetary policy of the Eurosystem and in making decisions concerning the tasks of the Eurosystem and the ESCB.

The Deputy Governor of Latvijas Banka participated in the work of the Supervisory Board of the ECB, ensuring that ECB tasks relating to the supervision of credit institutions were executed, and preparing the draft decisions to be submitted to the Governing Council of the ECB under the non-objection procedure. In May and September 2024, marking the 10th anniversary of the establishment of the ECB's SSM, Latvijas Banka organised two experience exchange events in Riga for experts from the central banks of the Eurosystem, sharing Latvia's experience and insights gained in the field of bank crisis management, as well as its achievements in financial innovation. Representatives of Latvijas Banka also participated in the committees and working groups of the Eurosystem and the ESCB, addressing issues of monetary policy, market operations, financial stability, financial sector supervision, payment systems, euro cash and the digital euro, statistics, international relations, communications, sustainability, climate and innovative technologies, and more.

In 2024, Latvijas Banka participated actively in the work of the authorities that form the European System of Financial Supervision2The European System of Financial Supervision is the framework for financial supervision in the EU that has been in operation since 2011. The system consists of three European supervisory authorities (EBA, ESMA, EIOPA), the ESRB, the Joint Committee of the European Supervisory Authorities, and the national supervisory authorities of the EU Member States.
, representing Latvia and making decisions in the ESRB, which takes decisions on issues related to EU macroprudential policy, as well as in the Boards of Supervisors of the EBA, the ESMA, and the EIOPA. Additionally, Latvijas Banka continued its participation in the SRB. Experts from Latvijas Banka contributed to the work of the committees and working groups of these authorities.

Representatives of Latvijas Banka also participated actively in the work of the committees and working groups of the EU Council, the EC, and Eurostat, addressing issues related to financial sector regulation, euro coins, economic forecasting, statistics, and other issues. On top of that, they provided support to the government in developing the national position on EU regulation.

In 2024, active work by the EU Council was under way on the EU legislative proposals published in previous years, including a final agreement being reached and the cycle of drafting EU legislation completed for the following EU legal acts governing the financial sector:

  • a set of legal acts concerning anti-money laundering, including regulations on the establishment of a European authority to combat money laundering and terrorist financing (AML/CFT);
  • the so-called proposal for Basel requirements (the capital requirements regulation for credit institutions);
  • a framework for instant payments;
  • the proposals for the further development of the Capital Markets Union through the regulatory framework for financial instruments and fund markets, central securities depositories and European market infrastructures (relating to central counterparty issues), and access to capital for small and medium-sized enterprises from listing their stocks on the stock exchange;
  • proposals concerning sustainability (corporate sustainability and environmental, social, and governance (ESG) ratings regulation) and digitalisation (the Artificial Intelligence Act).

Discussions on these four proposals published by the European Commission in the field of financial services in 2023 will also continue in 2025:

  • the so-called Open Finance package (the payment services regulation and access to financial data);
  • the digital euro regulation;
  • the proposal for establishing the bank sector resolution and crisis management framework;
  • a package of proposals aimed at promoting investment services and protecting private investors.

When participating in the meetings of the Economic and Financial Committee and its sub-committees, representatives of Latvijas Banka regularly helped prepare decisions concerning the economic development and financial stability of the EU, the development of EU economic policy strategy, and the coordination of international relations issues. While doing the latter, particular focus was given to assessing the economic consequences of Russia's aggressive war against Ukraine, monitoring macroeconomic and financial stability risks in the EU, as well as on implementing and coordinating the EU financial services policy.

Areas of activity