Bank of Latvia

Bank of Latvia   (Central bank)
Headquarters	Riga, Latvia
Leader	Bank of Latvia/President‎
Subpage	•Bank of Latvia/President
Latvia's Central Bank. Has dominated economic policy since Latvia's independence in 1991.

The Bank of Latvia (Latvian Latvijas Banka) is the Latvian member of the Eurosystem and has been the monetary authority for Latvia from right after independence in 1993 to 2013, when it changed from the local currency the Latvian lats to the euro.

Since 2014, it has also been Latvia's national competent authority within European Banking Supervision. The Bank of Latvia's administration is located in Riga.

The worst of both worlds

The economist Michael Hudson described how the bank functions:

Too many in Latvia, however, take a view of the poor and of the country's speculators that would comfortably fit in the pages of Ayn Rand's Atlas Shrugged. This is especially true of Bank of Latvia, which has dominated economic policy since Latvia's independence in 1991. For Latvia's elite, the internal devaluation and austerity program have become something of a vanity project. Coming of age during the 1980s when the USSR was crumbling and the US neoliberal model ascendant, they fully internalized market fundamentalism as a rigid dogma to advance liberation from the Soviet occupation. The chief criterion for its selection seems to be it was the model that looked most different from Soviet policy. To see their austerity model heralded by the IMF andECB today is seen as vindication of their worldview, and repudiation of the putdowns heaped on them by chauvinistic occupiers in the past. Elites aside, many emigrated. After these protests subsided, Latvians resigned themselves to the situation and left. Demographers estimate that 200,000 have departed the past decade – roughly 10 per cent of the population – at an accelerating rate that reflects the austerity being inflicted. The moral for Europeans is that a Latvian economic and political model can work only temporarily, and only in a country with a population small enough (a few million) for other nations to absorb émigrés seeking employment abroad.

and

The result has been to replace Soviet planning with that of European banks, creating a post-Soviet elite of oligarchs and kleptocrats. Latvians have ended up with the worst of both worlds: neocolonial financial and trade dependency on Western Europe, and a lingering resentment against Russia so strong that the nation has not fully developed its natural advantage as an intermediary with the West, except as offshore bankers to CIS oligarchs.

Many thanks to our Patrons who cover ~2/3 of our hosting bill. Please join them if you can.