Crisis, Economics, Financial Services, Latvia, Stability

"There has already been significant progress made in stabilizing the financial sector," said Anne-Marie Gulde, the Senior Advisor in the IMF's European department.

"It also cannot be ruled out that there might be more problems emerging...we are reasonably confident that any problems that will be emerging in this improved framework can be addressed," Gulde pointed out.

She acknowledged that as a whole the banking sector of Latvia was well capitalized and liquid.

Gulde also approved of the fact that the Latvian Government has been working on a scheme to help borrowers who have troubles repaying debts to banks. She said the IMF backed the idea in principle and was working with the authorities on how much money would be needed for it.

"On the principle the debt restructuring might be the necessary element to achieve the faster return to growth, I think that this is something we have learnt from the previous crises and we are very interested in working with the authorities on," the expert said.