Latvian Lawmakers Criticize Regulators Over Krajbanka Collapse
Latvian lawmakers criticized regulators over the bankruptcy of Krajbanka AS, the Baltic nation’s sixth-largest lender before it collapsed in 2011.
A decision not to evaluate the lender’s majority owner because he’d been cleared in Lithuania, home of Krajbanka’s parent, Bankas Snoras AB, “had serious negative consequences,” according to a parliamentary committee report released late yesterday.
The committee of 11 lawmakers “expressed concern that the bank regulator’s attitude toward Krajbanka’s insufficient capital for a long period of time was too tolerant,” according to the report.
Latvian regulators halted Krajbanka’s operations on Nov. 21 after discovering 167 million lati ($301 million) was missing. Snoras was seized five days earlier by the Lithuanian government over similar claims, triggering civil and criminal suits in London against the banks’ former owners, Vladimir Antonov and Raimondas Baranauskas.
The committee recommended tighter rules governing where municipalities, municipal- and state-owned companies can put money on deposit and the introduction of criminal liability for commercial banks’ board members who ignore bank procedures.
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