Bank of Latvia The profit for 2020 is 26.6 million euros and is approximately at the level of 2019, when it reached 27.2 million euros, according to the financial report.
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According to the Law on the Bank of Latvia, 70% or 18.7 million euros of the Bank of Latvia’s profit for 2020 will be transferred to state revenue and the rest of the profit to the Bank of Latvia’s reserve capital.
The Bank of Latvia’s total profit for the last five years has reached 104 million euros, of which 71 million euros have been transferred to state revenue.
In 2020, the Bank of Latvia continued to develop an efficient, secure and innovative payment infrastructure, incl. doubling the number and volume of processed flash payments during the year, as well as rapidly increasing the availability of flash links (which allows credit institutions’ customers to make flash and other payments more conveniently and faster, indicating only the beneficiary’s mobile phone number or other identifier linked to the beneficiary’s account). At the end of 2020, 321 thousand were registered in the Flash Link Register. flash links or 13 times more than at the end of the previous year. 3.7 million requests were made in the flash link register (215 times more than in 2019).
In the area of cash, in 2020 the central bank provided 133.7 million checks of banknotes received from credit institutions, of which 8.7% or 11.6 million were replaced with new ones. By improving the cash processing process, work has continued on the automation and modernization of banknote counting processes.
Another important area of the Bank of Latvia’s activity is economic analysis and research. The Covid-19 pandemic and the related economic policy response in both Europe and Latvia have led to a significant review of the Bank of Latvia’s research priorities and the adjustment of the macroeconomic forecasting process. The Bank of Latvia has also been actively involved in working groups set up by the government to support the economy in overcoming the consequences of Covid-19.
In 2020, the Bank of Latvia continued its research activities in three priority areas: monetary policy transmission, fiscal policy and government debt sustainability, and long-term growth and competitiveness.
In 2020, an in-depth study was also conducted on the determinants of interest rates on loans to domestic non-financial corporations, analyzing the voluminous microdata of the Credit Register with the help of econometric models.
In 2020, a number of activities important to society were implemented, for example, in cooperation with partners in the financial sector and the Saeima, amendments were made to the law so that thousands of people could be deleted in 2008-2009. The hopeless mortgage liabilities of the 2006 crisis, thus fully returning to economic circulation. The development of a digital teaching tool “My Economy” for schools, which will improve the quality of economics teaching, continued. Latvia also became actively involved European Central Bank in the process of evaluating the monetary policy strategy, inviting also the Latvian society to express an opinion on the future of monetary policy and a closer connection with the needs of the society.
In 2021, the Bank of Latvia plans a number of activities important to society. The flash request service will be an interbank solution that will allow you to send a lightning-fast payment request to the payer, who will only have to confirm it, and the initiator of the flash request will receive the money. The new service will allow entrepreneurs and public authorities to send payment requests, including billing information for direct confirmation (payment) without entering payment information. This will make the payment process even more convenient, reduce the possibility of errors and facilitate faster payment of bills in Latvia.
It is planned to discuss the possibility of introducing minimum free service and reachability criteria – minimum number of ATMs, maximum distance to the nearest ATM, minimum amount of cash available at no additional cost, minimum ATM availability opening hours.
In 2021, events are also planned that will significantly affect the day-to-day operations of the Bank of Latvia and the development of the entire financial sector in the near future, incl. the progress of the new law of the Bank of Latvia in the Saeima, which will provide for integration with the Financial and Capital Market Commission and the commencement of the work of the joint institution as of 1 January 2023. At the same time, it is planned to change the Bank of Latvia’s governance model this year by moving to single-level governance.
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