The mission visited Vilnius from June 3 – 12, 2002 and included Ms. Jodi Scarlata (MFD) as a member of the European II Article IV Consultation mission. Ms. Zuzana Brixiova, IMF Resident Representative, and her staff assisted in the work of the mission.
Excluding foreign bank branches.
In 2001, the calculation methodology for the CAR changed to correspond with the introduction of the Capital Adequacy Directive (CAD) II, which incorporated market risk. As a result of the change in the calculation, there was an increase in the number of banks with a CAR of less than 15 percent in 2001.
The CISD noted that this results from maturities differing over the reporting periods, data were not available on individual banks’ maturities breakdown, but the divergence was known to CISD and was not considered of concern.
A complete translation of the draft Law was not available to the mission.
Bank of Lithuania figures.
In 2002, the stock of securities outstanding increased from approximately LTL 174 million to LTL 477 million. However, in the first five months of 2003, the outstanding stock increased to LTL 784 million, as of end-May. According to the BoL, there are approximately 17,000 holders of these securities, making the average holding almost LTL 44 thousand per person, a significant per capita purchase. (In 2002, average monthly wages were LTL 1,119 or US$307.)
A primary difference (and a significant one) between the savings securities and Treasury bills is the commission charged by commercial banks to customers on t-bill transactions, a fee which is not born by the customer purchasing savings securities. Instead, the government pays the commercial banks for the transactions fees involved in conducting the sales of savings securities, making the effective yield on savings securities even higher.
The abolition of fixed fees on currency trading has furthered the use of foreign exchange to manage liquidity as the fees had been prohibitive, especially since positions are reversed in a few days.
The draft Law has been undergoing several stages of significant revisions and, at the time of the mission, the draft was not finalized. A complete translation of the latest version of the draft Law was not available to the mission, only the translation of the earlier (and unrevised) version was made available.
To be renamed the Insurance Supervisory Commission (SC) under the new Law.
This is in line with the arrangements for the Securities and Exchange Commission, but differs from that of the Bank of Lithuania.
New pension funds (outside of insurance companies) will be regulated by the Securities and Exchange Commission.