Banks, Financial Services, Latvia, Legislation, Markets and Companies

The five financial institutions say that they are concerned at the government and parliament's slow progress with improving rule of law in Latvia, as well as at several officials who call the systemic fraudulent insolvency processes "individual occurrences," and do not pay them enough attention.

The information released by the four commercial banks and Reverta today focuses on seven of the most controversial insolvency cases in the recent past that have generated the greatest publicity. These seven cases alone have caused the financial system a loss of EUR 174.25 million. However, these cases involving glaring and incomprehensible court rulings, are just the tip of the iceberg, and there are many more such cases that the public does not know about.

The statement by the banks and Reverta indicates that the said amount is enough to issue mortgages to about 5,000 young families, or build ten medium-sized plants. The state of Latvia has failed to collect dozens of millions of euro in taxes as a result of these fraudulent schemes. This money has in fact been stolen – it could have been invested in national development, to increase wages for teachers and medical workers, or treatment of patients, the financial institutions note in the statement.

They say it is incomprehensible why the justice minister and his predecessor refer to such insolvency cases as "individual instances", although it is clear that they are part of a system that has been created by swindlers, dishonest insolvency administrators, auditors, and judges. This, in turn, leads to the next major problem – threat to national security.

The financial system and most businessmen who are considering investing in Latvia expect the authorities, including ones that must ensure that courts function efficiently and justly, to act decisively. It has been the same persons mentioned in such cases for years, but there still have not been any noteworthy changes. For the good of society, this scheme has to be liquidated, the persons involved have to be punished and banished from the judiciary, says the statement.