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International Internet Magazine. Baltic States news & analytics Thursday, 28.03.2024, 21:42

Baltic countries to cooperate closer in development of capital market

BC, Riga, 18.10.2018.Print version
The Baltic states will cooperate closer in promoting development of the capital market, the Latvian Finance Ministry reported.

During the Pan-Baltic Capital Market conference at the European Bank for Reconstruction and Development (EBRD) in London, the three Baltic states reaffirmed their commitment to such a union by harmonizing capital market regulations and dismantling investment barriers. At the same time the representatives of the three countries reiterated their commitment to fully meet all regulatory obligations according to the highest international standards and best practice.


The goal of the initiative is to attract investment through the creation of a common capital market by combining the strengths of the three Baltic states and overcoming the constraints they often face due to their limited individual sizes.


In November 2017 the three countries signed a Memorandum of Understanding to create a capital market with active support of the EU and the EBRD. Several technical support projects have been launched since to lay the foundations of such a union including the framework for Pan-Baltic covered bonds and support for the further development of the regional fintech ecosystem. Support is provided by the European Commission (EC) through the Structural Reform Support Service (SRSS) and by the EBRD.


Latvian Finance Minister Dana Reizniece-Ozola said that cooperation with the EC SRSS and the EBRD has unlocked the potential for the Baltic capital market. "We have also further developed the concepts for the Baltic co-operation projects, which includes a pan-Baltic asset class in covered bonds which has generated great interest from potential issuers. Ongoing work on activating the Baltic equity market and mobilizing our local investment by pension funds and other institutional investors, as well as facilitating visibility of the Baltics in international market indices, are the key steps to achieve the full potential of our capital market," she said.


In recent months alone, the EBRD has made an equity investment in Auga Group, a leading producer of organic food; supported the privatization of the Port of Tallinn with the acquisition of a stake; and invested in green bonds issued by Lietuvos Energija. This was followed by an investment in the debut bonds of the retailer Maxima Grupa and, most recently, in senior bonds by Luminor Bank.


Jurgen Rigterink, EBRD First Vice President and Head of Client Services Group, noted that there had been good progress in the development of the capital markets union and this has also been accompanied by strong new investments. "We are pleased with the capital markets reform work in the Baltic states, including the creation of a framework for Pan-Baltic covered bonds, that we are delivering in cooperation with the EU’s SRS service," he said.


Meanwhile, Valdis Dombrovskis, Vice-President for Euro and Social Dialogue, Financial Stability, Financial Services and Capital Markets Union, European Commission said that by developing their capital markets, the Baltics can better stimulate investment and economic growth. "It is a positive development that three Baltic states have teamed up to create a common and larger capital market space, regulated by coordinated rules. This will send a clear welcome message to European and global investors. The European Commission is supporting this effort through its Structural Reform Support Program. In addition, the EU is working to facilitate and support investment into small and medium sized companies and strengthen local capital markets such as those in the Baltics through its Capital Markets Union initiative," he said.


The EBRD has been working in the Baltic states since 1991 and to date has invested some EUR 2 bln in more than 250 projects in Estonia, Latvia and Lithuania. Strengthening private enterprises and developing the capital market are among the Bank’s priorities in these countries.







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