On Monday 19 February, the European Central Bank (ECB) announced that it had called for a moratorium on payments made by the third-largest bank in Latvia, ABLV, which has been under the supervision of the ECB since November 2014.
The ECB made its decision on Sunday and on the same day, the competent Latvian authority, the Financial and Capital Market Commission (FCMC), imposed a temporary prohibition until further notice on payments made by the bank on its financial liabilities.
This decision follows the sharp deterioration of the bank's financial situation in recent days, the ECB explains in a press release, referring in particular to recent accusations of money laundering and involvement in illegal arms development programmes in North Korea.
On 13 February, the anti-financial crime network of the American Department of the Treasury recognised the Latvian bank as one of considerable importance in the question of money laundering, according to American legislation.
“A moratorium was considered necessary given that the bank is working with the Latvian central bank and authorities to address the current situation”, the monetary institute explained.
Governor of Latvia's Central Bank arrested on suspicion of corruption
On the same day, the governor of Latvia's Central Bank, Ilmārs Rimšēvičs, was questioned by the Latvian anti-corruption services and placed under arrest. He is reported to be suspected of having received a bribe of €100,000, according to the local media.
The Latvian Prime Minister, Māris Kučinskis, stressed that this did not jeopardise the Latvian financial system, according to Reuters. On Monday 19 February, following an emergency meeting of his cabinet, he announced that the Central Bank governor would be removed from his position upon his release.
Upon their arrival at the meeting of the Eurogroup on Monday afternoon, the European ministers declined to comment. The European Commissioner for Economic and Financial Affairs, Pierre Moscovici, also refused to comment on this particular case, but added that in general, the EU “condemns everything that looks like money laundering and tax evasion and especially when those who could have done that have important functions”. (Original version in French by Marion Fontana)