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Limitation of Bank of Latvia governor’s duties to be coordinated with ECB

Ilmārs Rimšēvičs/flickr.com/Bank of Latvia.
Saeima’s Budget and Finance Committee has agreed to continue the discussion in regards to amendments to the Law on the Bank of Latvia. Those amendments provide for limiting the term of the governor of the Bank of Latvia. Amendments will have to be coordinated with European Central Bank.

Amendments were initiated by members of Unity’s Saeima faction. Changes are intended to make sure the same person is not allowed to take more than two consecutive terms as the governor of the country’s central bank. Changes are also planned for the length of each term – five years instead of six.

During the meeting with Saeima’s committee, all members of the Bank of Latvia council admitted that more discussions will be needed for those proposals. No major objections were voiced.

It is also planned to expand the law with specific conditions for the governor of the central bank and his deputy. Aside from that, the legislative draft includes a point in accordance with which candidates for the post of the governor of the Bank of Latvia have to have a spotless reputation. If the management of the central bank do not comply with those conditions, the parliament will be able to organize a vote on their dismissal.

Saeima’s Budget and Finance Committee leader Jānis Vucāns mentioned that it is planned to coordinate amendments with European Central Bank.

Current regulations state that the Saeima is able to dismiss the governor of the Bank of Latvia only if the parliament receives his resignation letter. The governor can also be dismissed in relation serious violations of statutes and system of the European Central Bank. This can only be done if a relevant court ruling comes into force. There are also other ways to dismiss the governor of the Bank of Latvia. All of them are listed in the law.

European Central Bank system and its statutes detail: only when the head of a central bank no longer fits requirements or commits a serious crime is it possible to dismiss him.

As previously reported, the governor of the Bank of Latvia Ilmārs Rimšēvičs, accused of bribery, has decided to not step down. He is prohibited from leaving the country and performing his duties.


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