The availability of financial resources is one of the key elements of public resilience in the event of a threat to national security. The National Security Law establishes that the critical financial services that must be ensured, if there is a threat to national security, are cash and non-cash payments provided by credit institutions, as this means that financial resources are available to people in Latvia. Under the National Security Law and the criteria established by Latvijas Banka, the banks that have been designated providers of critical financial services in Latvia are Swedbank AS, AS SEB banka, AS Citadele banka, and the Latvian branch of Luminor Bank AS.
According to Latvijas Banka's Regulation No 252 "Regulation on the Management of Critical Financial Services" (the Regulation on the Management of Critical Financial Services), the providers of critical financial services are those that provide the following critical financial services:
1) non-cash payments:
- credit transfers between the providers of critical financial services, other credit institutions, and the Treasury when the STEP2 system is not available. Such transfers previously only had to be ensured between the providers of critical financial services;
- offline card payments that do not access the internet, allowing natural persons to purchase basic goods up to a maximum total value of 200 euro, if payment card infrastructure is not available;
2) cash payments:
- the providers of critical financial services ensure that cash is continuously available in ATMs designated as critical ATMs. Latvijas Banka has worked with the providers of critical financial services to establish a network of critical ATMs that contains at least 10% of the number of ATMs operated daily by the providers of critical financial services as at the end of the previous calendar year, including one in each town. There are currently 97 ATMs in the network of critical ATMs (the map of critical ATMs);
- to ensure the continuous operation of the critical ATMs, and allow as many people as possible to access cash, the providers of critical financial services plan the minimum amount of cash that must be provided in the critical ATMs so that each customer using each of their payment cards issued by a financial market participant, other than the operator of the ATM, can withdraw 500 euro per day in cash irrespective of the number of payment cards they have or the number of payment accounts they have with the service provider;
- the providers of critical financial services also need to comply with various requirements for critical financial services if there is a threat to national security, while strengthening the requirements for cash infrastructure, such as:
- a critical ATM must be available to the customer and operate during the hours of availability and operation of the ATM set for each day by the provider of critical financial services before the threat to national security emerges, and for no less than 14 hours per day;
- cash must be available in the critical ATM set;
- solutions need to be in place to ensure an uninterrupted connection between the critical ATM set and the information systems, as well as an uninterrupted power supply to the network of critical ATMs.
The Regulation on the Management of Critical Financial Services establishes that Latvijas Banka evaluates the plans of critical financial service providers for continuity of operation, provides recommendations for their improvement, and coordinates the provision of critical financial services if there is a threat to national security.
By the end of 2024, in accordance with the transitional provisions of the Regulation on the Management of Critical Financial Services, the implementation of the requirements for the availability of the following critical financial services was ensured:
- for non-cash payments through offline card payments (such a solution was introduced for certain food and fuel retailers in 2024, and is planned to be expanded to pharmaceutical retailers in the first half of 2025);
- for cash payments, a solution was introduced to ensure an uninterrupted connection between the critical ATM set and the information systems, as well as an uninterrupted power supply to the network of critical ATMs (in 2025, in collaboration with the providers of critical financial services, further improvements to the solutions ensuring an uninterrupted power supply to the network of critical ATMs are planned).
By implementing a solution that enables offline card payments for the purchase of basic goods from critical retailers, Latvia has become the first country in the euro area to offer such an option to its residents. This significantly enhances the ability of Latvian society to function in the case of a national threat and strengthens the operational resilience of the financial sector in ensuring the availability of financial services to the population.
At the same time, to facilitate the availability of cash, amendments to the Credit Institution Law drafted by Latvijas Banka were adopted in 2024, along with the corresponding Latvijas Banka's regulations. The amended law and accompanying regulations strengthen the responsibility of credit institutions operating an ATM network to maintain the required number of ATMs and ensure the continued availability of critical ATMs.
In addition, in 2024, a test was organised to demonstrate whether the availability of critical financial services was ensured. Together with the providers of critical financial services, the economic operators involved in the provision of these services, the Ministry of Finance, the Ministry of Defence, and the Treasury, Latvijas Banka carried out a simulation to assess whether the availability of critical financial services could be ensured in the case of a potential threat to national security. The lessons and conclusions drawn from the test were instrumental in shaping the new regulation of critical financial services and addressing other issues related to ensuring and coordinating the availability of critical financial services.
In 2024, Latvijas Banka continued to run a communication campaign to inform the public about the providers of critical financial services, the financial services defined as critical, the size of them, and, finally, also about how to respond in a crisis event. This included publishing an information booklet Learn about cash and other financial services in a crisis that gave advice on the cash preparations everyone can make to be better prepared to deal with a crisis.
In 2025, it is planned to continue improving the framework of critical financial services by testing existing solutions for the availability of critical financial services, making improvements where necessary, and planning the further development of the framework of critical financial services.
In addition, in 2025, Latvijas Banka plans to highlight the issue of introducing a comprehensive solution in the country to ensure the availability of critical services in any crisis situation. This would include identifying critical services across all economic sectors essential to society’s functioning, setting requirements to guarantee their availability, thereby promoting the resilience of both society and the economy.
In 2024, Latvijas Banka organised and participated in several events aimed at strengthening the operational resilience of the financial sector in the Baltic and Nordic regions, taking into account the interdependence of financial sector participants in these countries, their geographical proximity, and current geopolitical risks. Within the framework of these events, existing solutions for strengthening the operational resilience of the financial sector in the Baltic and Nordic countries, including cross-border cooperation in this field, were identified, and proposals for their development were prepared. This work is planned to continue in 2025.
