VILNIUS — New liquidity reserve requirements will be brought in for banks in Lithuania from June 30 so they can survive in tough times.
Banks have had to cut credit severely in the Baltic states after the crisis hit and bad loans started stacking up. Since late 2008, credit has been hard to come by and now interest rates are higher than before. The result has been a severe crisis in the construction and real estate sectors [private_supervisor]primarily, with many others suffering to a lesser extent.
The new requirements will force banks to keep enough reserves to continue working in adverse conditions without changing the business model.
“As the liquidity of the banking system is sufficiently high and exceeds the standard levels, they don’t need additional financial resources, at least for now. In the future, additional financial resources will depend on the bank’s projected cash flows and its ability to manage liquidity risk, taking into account possible changes in the market and the bank’s stress test results,” Bank of Lithuania representative Mindaugas Milieška told Verslo Žinios.
Milieška said better liquidity risk measurement and management on the part of the bank will create prerequisites for safe operation and contribute to bank depositors and other ensure the interests of creditors and investors.
Liquidity leverage capacity must be kept as a plan to ensure adequate funding for them to carry out business operations and maintain strategy for the long term. [/private_supervisor] [private_subscription 1 month]primarily, with many others suffering to a lesser extent.
The new requirements will force banks to keep enough reserves to continue working in adverse conditions without changing the business model.
“As the liquidity of the banking system is sufficiently high and exceeds the standard levels, they don’t need additional financial resources, at least for now. In the future, additional financial resources will depend on the bank’s projected cash flows and its ability to manage liquidity risk, taking into account possible changes in the market and the bank’s stress test results,” Bank of Lithuania representative Mindaugas Milieška told Verslo Žinios.
Milieška said better liquidity risk measurement and management on the part of the bank will create prerequisites for safe operation and contribute to bank depositors and other ensure the interests of creditors and investors.
Liquidity leverage capacity must be kept as a plan to ensure adequate funding for them to carry out business operations and maintain strategy for the long term. [/private_subscription 1 month] [private_subscription 4 months]primarily, with many others suffering to a lesser extent.
The new requirements will force banks to keep enough reserves to continue working in adverse conditions without changing the business model.
“As the liquidity of the banking system is sufficiently high and exceeds the standard levels, they don’t need additional financial resources, at least for now. In the future, additional financial resources will depend on the bank’s projected cash flows and its ability to manage liquidity risk, taking into account possible changes in the market and the bank’s stress test results,” Bank of Lithuania representative Mindaugas Milieška told Verslo Žinios.
Milieška said better liquidity risk measurement and management on the part of the bank will create prerequisites for safe operation and contribute to bank depositors and other ensure the interests of creditors and investors.
Liquidity leverage capacity must be kept as a plan to ensure adequate funding for them to carry out business operations and maintain strategy for the long term. [/private_subscription 4 months] [private_subscription 1 year]primarily, with many others suffering to a lesser extent.
The new requirements will force banks to keep enough reserves to continue working in adverse conditions without changing the business model.
“As the liquidity of the banking system is sufficiently high and exceeds the standard levels, they don’t need additional financial resources, at least for now. In the future, additional financial resources will depend on the bank’s projected cash flows and its ability to manage liquidity risk, taking into account possible changes in the market and the bank’s stress test results,” Bank of Lithuania representative Mindaugas Milieška told Verslo Žinios.
Milieška said better liquidity risk measurement and management on the part of the bank will create prerequisites for safe operation and contribute to bank depositors and other ensure the interests of creditors and investors.
Liquidity leverage capacity must be kept as a plan to ensure adequate funding for them to carry out business operations and maintain strategy for the long term. [/private_subscription 1 year]
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