Theoretically, non-banking financial institutions that perform bank-like activities are associated with diversification and specialisation benefits. Therefore, it could be assumed that they contribute to making the financial system more efficient and more resilient. However, developments in the run-up to the financial crisis revealed something else: activities and entities in the shadow banking system can pose a threat to financial stability.
The Bank of Latvia has developed and is using the full set of the same indirect, market based monetary policy instruments that are used by the European Central Bank. On May 18, 2000, the Bank of Latvia was assigned quality management ISO 9002 certification. Movement of capital Both current and capital account transactions have been fully liberalised in Latvia.