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Latvia’s parliament approves amendments that limit bank liquidators’ remuneration

Photo: Saeima Chancellery.
The Saeima has approved in the final reading amendments to the Credit Institutions Law to limit remuneration of bank liquidators and insolvency administrators.

At the same time, the parliament declined Unity party’s proposal to establish that monthly remuneration amount of the liquidator and his assistant must not exceed EUR 100,000.
 

Changes to the Credit Institutions Law provide for reducing the base of the liquidator’s or insolvency administrator’s remuneration. This base is planned to be set as the different between the total volume of monetary funds paid to creditors and the amount from the liquidated institution’s budget, its deposits in the Bank of Latvia, free funds in other credit institutions and funds acquired from selling financial documents, as well as funds acquired from claiming enforcement requests against the member state or foreign country.
 

Calculation threshold for liquidator’s remuneration starts from 2% of the liquidator’s recovered funds whose volume exceeds 30% of this difference, 3% if the size of funds does not exceed 60%, 4% if the size does not exceed 75%, and 5% if it does exceed 75%.
 

Such a regulation would be applied if creditors fail to reach an agreement in regards to remuneration. A similar regulation will apply to insolvency administrators.
 

Changes were added to the law once it became clear ABLV Bank would be liquidated and that the liquidator would get the opportunity to acquire millions worth of funds from easily realized assets.

BNN/LETA

01-03-2018
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