Ex-Soviet Cash Drain Deepens as Baltic Bank Rules Tighten
- Latvian deposits exceed foreign for first time in three years
- Regulators began crackdown after questioning sources of cash
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Outflows of foreign cash from Latvian banks are set to deepen as the Baltic finance hub that’s been a popular choice for clients in the surrounding ex-communist region tightens regulation.
Latvian banks that cater to foreign clients saw a reversal in their fortunes last year, when deposits fell by a quarter. Having dominated savings for three years, that leaves them accounting for less than half the total. The trend will continue in 2017 as banks implement tougher rules designed to squeeze out riskier clients, according to the chief regulator.