Latvijas Banka regulates and supervises the operation of the financial market and its participants.
Supervision is performed in the public interest in order to promote:
- the protection of interests of investors, depositors and insured persons,
- the sustainable development and stability of the financial market,
- the prevention of money laundering and terrorism and proliferation financing,
- the application of international and national sanctions.
Latvijas Banka performs supervision for the purpose of identifying, in a timely manner, the current and potential risks and their potential impact in order to reduce or prevent the risks and their impact by prioritizing activities against risks with high probability of occurrence and major adverse impacts and also taking into account the type of activity of market participants and the impact thereof on the financial market, its structure and complexity of service, thus ensuring compliance with the principle of proportionality.
The Council of Latvijas Banka has set up the Supervision Committee which is authorised:
- to implement the supervisory strategy for financial market participants supervised by Latvijas Banka and approved by the Council of Latvijas Banka;
- to issue, suspend and cancel a special permit (licence) or registration for operation on the financial market, as well as to decide on the refusal of special permit (licence) or registration for operation on the financial market;
- to approve supervisory methodology and ensure its implementation;
- to approve supervision plans and risk assessment and ensure the implementation of supervision plans;
- to decide on the application of early intervention measures;
- to decide on restrictions on the rights, performance of liabilities and activities of a financial market participant, as well as the appointment of an authorised person, except the suspension of operation, restrictions on performance of liabilities in full and appointment of the authorised person associated with this decision in relation to credit institutions and investment firms subject to the Law of Recovery of Activities and Resolution of Credit Institutions and Investment Firms;
- to decide on the application of sanctions and measures laid down in sectoral laws to a financial market participant and another person;
- to determine that a financial market participant is failing or is likely to fail;
- to decide on the submission to a court an application for initiation of insolvency or liquidation proceedings against a financial market participant and the appointment of an administrator or liquidator;
- to carry out other tasks referred to in the Supervision Committee’s rules.
The financial market participants supervised by Latvijas Banka, in accordance with the law governing the operation of the relevant financial market participants, makes payments to Latvijas Banka in order to cover expenditures of Latvijas Banka which are directly or indirectly related to the regulation and supervision of the financial market and its participants, the application of resolution, and the provision of compensation disbursement schemes. Latvijas Banka determines the amount of payments by the financial market participants and also the procedures for the calculation and making of such payments.