Banks, Financial Services, Latvia, Loan

Maris Mancinskis.

In an interview with the newspaper Biznes&Baltija, Mancinskis points out that any bank is a business, and the management in every business venture must develop plans, market development forecasts, assess risks and take other necessary action.

The banks in Latvia made mistakes in their estimates, and now they are paying for their mistakes by suffering large losses, admits Mancinskis.

Lenders in Latvia have made many mistakes. For instance, the banks could have curbed lending volumes and taken less risks, Mancinskis points out. Besides, the banks also believed erroneously that borrowers fully understood what they were doing, writes LETA.

One of the most important task for the banks in Latvia in the future will be to educate borrowers, so that the people would be able to make such decisions in financial matters that would be as much in their own interest as possible.

The transition to capitalism from socialism has been too fast in Latvia, Mancinskis concludes.

"Now there is no sense in discussing what should have been done two or three years ago," says Mancinskis, stressing that it is much more important to remember in the future all what has been happening in Latvia the past several years.

As reported, The banking sector's overall losses reached LVL 59.3 million at the end of February, mainly due to the expense of forming reserves against bad credit. However, up to the end of February, nine Latvian banks and the local branch of one foreign bank were operating with a profit, occupying a 24.8 % share of all banking assets, and earning a profit of LVL 1.5 million.