Regulatory Alerts2026-06-17
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Latest Latvian Bank Financial Stability Report 2026 Published
The Latvian Bank published the 2026 Financial Stability Report, confirming the stability of the financial sector while highlighting risks from geopolitical shocks and long-term uncertainty. The report details a reduction in the number of Other Systemically Important Institutions (O-SIIs) from five to three following a framework review, and notes that bank profitability declined in 2025 due to lower interest rates and increased provisions, though capital reserves remain adequate. It further identifies rising credit risks in energy-intensive sectors, stabilizing commercial real estate markets, and significant fiscal vulnerabilities related to defense spending and public debt levels.