Supervision plan and onsite inspections

Published: 26.11.2022 Updated: 20.12.2024

Latvijas Banka has set the financial market supervisory priorities which serve as a basis for the approved and published financial market supervision plan for 2025. It provides for 27 on-site inspections and various off-site activities to gain assurance about the resilience and sustainability of the financial sector and the management of various risks and to make sure that the interests of the customers serviced by these institutions are protected.

Supervisory priorities and the focus areas

 

Operational and financial resilience

Credit institutions

  • Compliance with DORA requirements
  • Profitability resilience in a changing economic and regulatory environment
  • Addressing deficiencies and shortcomings in credit risk management and asset quality assessment identified during supervision process
  • Quality of data and reports
  • Management of sanction risks
  • Management of risks associated with tax evasion

Cooperative credit unions

  • Deficiencies and shortcomings in credit risk management
  • Compliance and performance quality of the Management Board and the Audit Commission

Insurers

  • Compliance with DORA requirements
  • Adequacy of insurance companies technical provisions and risk transfer

Private pension funds

  • Compliance with DORA requirements

Issuers

  • Quality, completeness, and relevance of data and reports
  • Protection of shareholder rights
  • Corporate governance

Stock Exchange, Central Securities Depository

  • Quality, completeness, and relevance of data and reports
  • Capital adequacy and risk management
  • Compliance with DORA requirements

Investment firms

  • Quality, completeness, and relevance of data and reports
  • Quality of internal governance, including risk management
  • Compliance with DORA requirements
  • Management of sanction risks

Crowdfunding platforms

  • Compliance with DORA requirements
  • Corporate governance
  • Capital adequacy

Payment institutions and e-money institutions

  • Compliance with DORA requirements
  • Corporate governance
  • Capital adequacy
  • Protection of customer funds 
  • Management of sanction risks
  • Management of risks associated with tax evasion

Investment management companies (IMCs)     

  • Compliance with DORA requirements     

Alternative investment fund managers

  • Management of sanction risks
  • Management of risks associated with tax evasion  

Crypto-asset service providers      

  • Management of operational risks for crypto-asset service providers

Business model sustainability in a transition economy

Credit institutions 

  • Quality of strategic planning
  • Assessment and integration of sustainability risks into the credit institution’s strategic objectives
  • Availability of financial services

Cooperative credit unions

  • Quality of strategies

Insurers

  • Integration of sustainability risks into risk management
  • Resilience to climate risks

Private pension funds

  • External control function by the custodian bank              
  • Integration of sustainability risks into risk management       

Issuers

  • Ensuring compliance requirements in sustainability

Investment firms

  • Viability of the business model, including capital adequacy
  • Integration of sustainability requirements into a business model   

Investment management companies (IMCs)     

  • External control function by the custodian bank     
  • Integration of sustainability risks into risk management      

Alternative investment fund managers

  • External control function by the custodian bank     
  • Integration of sustainability risks into risk management      

Market conduct risk

Insurers

  • Value for Money

Private pension funds

  • Quality of information disclosure
  • Value for Money

Stock Exchange, Central Securities Depository

  • Stability, resilience, and capacity of trading and settlement systems  

Investment firms

  • Monitoring of cross-border activities
  • Investment advice and marketing   
  • Assessment of suitability and compliance

Crowdfunding platforms

  • Availability of information   

Investment management companies (IMCs)     

  • Quality of information disclosure

On-site inspections

In 2025, Latvijas Banka plans to carry out 9 on-site inspections in the area of prudential (safe practice and prudent risk) supervision, 9 inspections relating to the prevention of ML/TPF and to sanctions and 3 inspections in the area of ICT risk. Additionally, Latvijas Banka's supervision experts will participate in the inspections conducted by the European Central Bank.1The on-site inspection plan of the European Central Bank is not publicly available; therefore, these inspections have not been included in the on-site inspection plan published by Latvijas Banka.

One on-site inspection will be focused on the protection of the customers serviced by credit institutions, assessing the processing of covered deposits and guaranteed compensation.

By segment, the inspections planned for 2025 are as follows:

  • 11 on-site inspections at banks,
  • 3 inspections in the insurance sector,
  • 2 – in the area of investment,
  • 2 – in the area of payment services,
  • 3 – at investment firms,
  • 1 – at stock exchange and CSD.

Off-site inspections

Alongside on-site inspections, Latvijas Banka is planning a wide range of off-site activities, particularly horizontal reviews, operational assessments, and strategic risk evaluation.

Latvijas Banka’s Financial Market Supervision Plan 2025

Supervision