16 Aug 2019
The Latvian lender which accused the country’s central bank head of corruption is failing and will be shut down, European banking authorities said on Thursday.
PNB Banka, one of the smallest lenders under ECB supervision with just 550 million euros of assets, has seen “significant deterioration in its capital situation to the point that the bank’s assets were less than its liabilities,” the ECB said in a statement.
The lender came into the spotlight when it accused Latvia’s central bank chief Ilmars Rimsevics of seeking bribes and using the local supervisor’s decisions “as a goad to extort”.
Rimsevics, who has denied all accusations, was briefly detained by Latvian authorities last year and barred from office for several months but the European Court of Justice said that Latvia has failed to prove his guilt so his removal was illegal.
While the ECB normally supervises larger institutions, it took over PNB Banka on a request by the Latvian financial watchdog, which said it was hoping this would help “avoid any misunderstanding and possible reproaches” after the bank’s allegations.
By Balazs Koranyi, Reuters, 15 August 2019
Read more at Reuters
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