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International Monetary Fund
This paper presents key findings of Latvia’s Financial System Stability Assessment, including Reports on Observance of Standards and Codes on Banking Supervision; Payment Systems; Securities Regulation; Insurance Regulation; Corporate Governance; and Monetary and Financial Policy Transparency. The assessment reveals that the banking system of Latvia is well capitalized, profitable, and liquid following its recovery from the effects of the Russian crisis in 1998. A notable feature of the financial system is the significant share of nonresident deposits and foreign equity in the banking system and nonresident investment in the securities market.
International Monetary Fund
Developments and prospects of nonbank financial institutions of Latvia have been presented in this paper. Foreign direct investment (FDI) inflows to Latvia have declined compared with their earlier levels. This poses an important policy challenge owing to benefits of FDI in terms of financing the current account deficit, contributing to capital formation, productivity, and exports. This paper also discusses the role of the Latvian Privatization Agency (LPA) in the privatization of Latvia's public enterprises and property, along with statistical data on economic indices of Latvia.