On Thursday, 23 September, the Saeima adopted a new Law on the Bank of Latvia, which will stipulate the operation of the central bank of Latvia following its merger with the Financial and Capital Market Commission.
The Draft Law was developed to establish the structure and operation of the Council of the Bank of Latvia following the upcoming merger of the Financial and Capital Market Commission with the Bank of Latvia, respecting the independence of the Bank’s monetary policy function, as well as its function as a finance and capital market supervisor and resolution authority.
Mārtiņš Kazāks, Governor of the Bank, previously informed the Members of the Budget and Finance (Taxation) Committee of the Saeima, which is responsible for the progress of the Draft Law, that the merger of the central bank and the financial and capital market authority would bring several benefits. For example, combining the knowledge and skills of the staff at both institutions will promote effective maintenance of financial stability, decrease systemic risks, achieve a well-rounded view of the developments in the finance and capital market, and ensure more effective action during market turmoils and crises. It is also crucial that it will ease the administrative burden and save staff, financial, material and technical resources.
The amended Law sets out the principles of the operation of the Bank of Latvia, including its tasks, the structure of the Council, and financial matters, as well as the role of the central bank of Latvia in exercising macro-prudential supervision.
The amended law also provides for the scope of competence of the Bank and the necessary legal tools to regulate and monitor the financial market and its participants, the requirements for ensuring bank statistics, as well as special requirements regarding the protection of information concerning the bank.
The superseded Law on the Bank of Latvia has been in force since 1992. The amended Law on the Bank of Latvia will take effect on 1 January 2023.
Saeima Press Service