Hence, efforts to become an EU member have enhanced Latvia’s progress towards integration into the world economy. On the other hand, membership in the EU requires a well-functioning market economy, one which is able to cope with competitive pressures and market forces within the union, as well as the capacity to undertake the obligations of membership.
The key tasks facing supervisors now are to observe the market very closely and to press ahead with efforts to improve the legal framework for coco bonds. Once these tasks have been accomplished, coco bonds can be a useful addition to banks’ capital structure. By helping to strengthen the capital base, they will make an added contribution to enhancing banks’ resilience to future crises.