One of the tasks of Latvijas Banka is to advise the Saeima and the Cabinet of the Republic of Latvia on monetary policy and on aspects of economic policy that are associated with Latvia's participation in the euro area, as well as other issues related to the work of Latvijas Banka.
In 2024, officials and employees of Latvijas Banka held regular meetings with members of the Saeima and the government of the Republic of Latvia. They also participated in committee meetings of the Saeima and the Cabinet of the Republic of Latvia, and in the work of several committees and working groups established by the government to give opinions on financial and economic development.
In its analysis of Latvia's economic development prospects, Latvijas Banka provided comprehensive analytical and data-driven support, offering expert advice to the Saeima and the government on issues affecting the country's economy and development, including tax policy, social protection, education, foreign trade, human capital development, to name a few.
Latvijas Banka continued its analysis of the Latvian financial sector's role in the country's economy, focusing on the accessibility of funding and financial services, while equipping policymakers with insights into existing barriers and presenting proposals for improvement.
Following analysis and proposals by Latvijas Banka, regulatory amendments were introduced to enable more convenient and cost-effective refinancing of private mortgages. In 2024, at the initiative of Latvijas Banka, work began on developing laws and regulations aimed at removing barriers to the refinancing of loans and leases for legal persons. As a result of discussions with policymakers, amendments to the Commercial Law were drafted. The inter-institutional coordination and refinement of the amendments will continue throughout 2025.
To enhance access to financial services and prevent excessive risk aversion, a strategic framework for the proportionate and practical application of AML/CFT requirements to honest customers was developed in cooperation with the Ministry of Finance in 2024. As a result, various institutions implemented measures to enhance access to financial services by tackling systemic issues within this area. For example, Latvijas Banka conducted a horizontal review of all credit institutions, identifying deficiencies and directing them to develop corrective action plans, while also monitoring the implementation of these plans.
In 2024, an analysis of financial services availability in the regions was conducted, alongside a detailed examination of the challenges surrounding mortgage lending in these areas. Based on the findings, proposals for improvements, including amendments to laws and regulations, were formulated and presented to policymakers. As a result, starting in 2026, access to financial services across will improve significantly.
Latvijas Banka cooperated with the Investment and Development Agency of Latvia to advocate for the interests of potential foreign financial market participants seeking to provide services in Latvia, aiming to bolster competition within the financial sector.
Experts of Latvijas Banka engaged in various working groups and professional organisations, as well as in collaborative efforts with relevant ministries and institutions. Their involvement included sharing expertise, offering advice, and providing support and proposals. This contribution extended to the drafting and amendment of regulatory acts across a broad range of areas within their scope of competence, including:
- economic forecasts;
- government expenditure and the programming and uptake of EU funds;
- enhancement of the state-funded pension scheme;
- development of the financial sector, including specific segments, such as FinTech companies, credit unions, pension funds, alternative investment funds, insurance, and reinsurance firms, etc.;
- financial literacy and reducing financial fraud;
- critical financial services;
- deposit protection;
- cash;
- digital euro;
- AML/CFTP;
- strengthening and effective enforcement of sanctions against Russia and Belarus.
Latvijas Banka submitted its opinion to the Constitutional Court in response to claims from natural persons and a legal person concerning amendments to the Consumer Rights Protection Law. These amendments relate to proposed support measures for mortgage borrowers, as well as to matters regarding the determination of land rent in cases of compulsory lease.
Employees of Latvijas Banka continued to participate in their capacity as experts in the Working Group for the Preparation of the Notification of the General Government Budget Deficit and Debt chaired by the CSB, compiling the notification data for the general government budget deficit and debt for 2023 and dealing with the methodological issues related to the compilation of these data.
Throughout the reporting year, Latvijas Banka continued to support the government in advancing Latvia's active engagement with the EU, OECD, and MONEYVAL, while also facilitating information exchange with international credit rating agencies and preparing for the Republic of Latvia's borrowing transactions.
In the autumn of 2024, Latvijas Banka initiated the coordination process for developing Latvia's financial technology strategy, with further progress anticipated throughout 2025. Latvijas Banka actively cooperates with the Ministry of Finance, the Ministry of Economics, the Investment and Development Agency of Latvia, the Riga Investment and Tourism Agency, and other public institutions, as well as industry associations and business representatives, in shaping the development of the strategy. The Ministry of Finance intends to submit the strategy for approval in the first half of 2025.