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Andris Berzins in Cesis, 28.11.2011. Photo: president.lv

At a meeting with local businessmen and Cesis Region Council Chairman Gints Skenders, stability of the banking sector and the global economy's prospects were discussed, writes LETA.

"One may say that, percentage-wise, Krajbanka did not have a major effect on Latvia's financial system, but the bank had a very large number of clients, mostly pensioners and low-income residents. As for the further actions regarding the bank, I can say that nothing is over yet, the liquidation process will be gradual, and only after it is over will we be able to evaluate professionalism of the banking supervisory authorities," said Berzins.

Commenting the fact that many local governments had deposited their money in Krajbanka, Berzins said that this was not something to reproach the municipalities with: "I am ready to defend any local government that will be criticized for keeping their money in Krajbanka."

During the meeting, also were discussed Latvia's tax policy, demand for labor, quality of education, entrepreneurship, doing business in rural areas, the territorial reform. Berzins said he believed that local governments' role would increase in the future. "Mergers that will create larger and stronger local governments must be supported, because that is Latvia's future," said the president.

Commenting the future of Cesis Region, Berzins said that Cesis was a very good place to live in, yet there was still much to do regarding business environment. Much depends on the local businessmen, he added.

As reported, the Financial and Capital Market Commission halted Krajbanka operations on November 21 after a deficiency of funds was established in the bank. Since the Lithuanian authorities have decided to file for bankruptcy of the Lithuanian bank Snoras, the parent bank of Krajbanka, the Financial and Capital Market Commission will file for Krajbanka’s insolvency.

The State Police have started a criminal procedure over deficiency of funds established at Krajbanka. The criminal case was started pursuant to the Criminal Law's Section 196 Part 2 – use of and exceeding authority in bad faith for purposes of acquiring property.

The payment of state-guaranteed deposits commences for Krajbanka depositors today via Citadele banka branches.