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Europe to Wind Down Latvian Bank Targeted by U.S. Over Sanctions

  • ABLV says political reasons left it with no recovery chance
  • Clients pulled 600 million euros after Treasury announcment
Latvian Central Bank Governor Ilmars Rimsevics Interview
Photographer: Roni Rekomaa/Bloomberg
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European authorities will close ABLV Bank AS, the Latvian lender facing U.S. accusations of money laundering tied to North Korea that’s central to the political scandal shaking the euro zone this week.

The European Central Bank initiated the radical step to stem the turmoil engulfing one of the currency area’s smallest members, saying Latvia’s third-largest lender was failing or likely to fail. It followed an ECB freeze on ABLV payments after the allegations triggered an exodus of deposits. Latvia’s representative on the ECB Governing Council also was detained a week ago amid bribery allegations.