We will look back to the past performance and mark future challenges celebrating the centenary of Latvijas Banka
We will look back to the past performance and mark future challenges celebrating the centenary of Latvijas Banka
1st November 2022 will mark the 100th anniversary of the establishment of Latvijas Banka. During this period, an independent and competent institution with a long-term vision for monetary policy issues, providing the basis for sustainable development of the state has been created.
The centenary of the central bank will be celebrated throughout 2022 by looking back to the past performance and outlining future challenges. On its 100th anniversary, Latvijas Banka is willing to share its knowledge and historic testimonies with the public, tell people about cultural values and give them the joy of celebration and discovery. At the same time, we will look into the future – how our currency, the euro, is changing together with the world, acquiring new, digital forms. At the same time, the role, tasks and contribution of a central bank to the common public good are also changing.
"What are our aspirations for Latvijas Banka for the next hundred years? One thing is certain – we'll experience many changes. But I'm sure that the foundations of the bank will remain the same – to be reliable, smart, and independent. To serve the common good. Let's celebrate this year together. Let's celebrate through action. Action driven by our hearts, and made possible with our minds," emphasises Mārtiņš Kazāks, Governor of Latvijas Banka.
Some of the planned events are as follows:
- during the Visitors' Month in May, the central bank's doors will be open (conditional on epidemiological situation) to anyone interested in participating in a guided tour focusing on the architecture of Latvijas Banka's buildings, the past and present of the institution, as well as take part in creative workshops and other activities;
- from May to December, an exhibition "From Ventspils to Valka" will visit nine cities of Latvia which were once home for branches of the central bank. The exhibition will bring back memories of the places and buildings, as well as events and personalities that played a significant role in Latvijas Banka's operation from 1922 to 1940;
- in October, an exhibition "Our Values", whose leitmotif is money as a significant symbol of Latvia's image and national values, will be open at the Latvian National Museum of Art and will run for almost four months;
- in November, a scientific publication dedicated to the centenary of Latvijas Banka will be presented; its author is historian Ineta Lipša and scientific editor – historian Aivars Stranga. Examining previously unexamined and unpublished sources, the book will present the management of Latvijas Banka in decision-making processes and in interactions with other institutions and their leaders, starting from the establishment of Latvijas Banka in 1922 until its liquidation in 1940 as a result of the Soviet occupation;
- in its anniversary year, Latvijas Banka will continue its tradition of organising a high-level international economic conference under the sign of the centenary. This year's conference will be held on 3 November. The themes to be discussed at the conference with the participation of euro area monetary policy makers are as follows: the future mandate of the central banks and its impact on the central bank strategy; the changing role of the euro, the future and digital currency; the role and transformation of the financial sector;
- and other events.
Detailed information on both the centenary of Latvijas Banka and the planned events is available on the website https://www.bank.lv/en/about-us/latvijas-banka-100.
On 18 November 1918, the Republic of Latvia was proclaimed, and both the financial system of Latvia and its national currency had to be created from scratch. Latvijas Banka was established to implement successful monetary policy, and it was granted the right to issue the lats banknotes (banknotes of Latvijas Banka).
Temporary Statutes of Latvijas Banka were approved on 19 September 1922 by a decision of the Cabinet of Ministers, and its initial capital was 10 million lats. The bank was established on the basis of the State Savings and Credit Bank, with Latvijas Banka taking over its assets and liabilities on 1 November 1922. Latvijas Banka carried out the direct responsibilities of a national central bank, i.e. the issuance of banknotes and coins, monitoring of their supply and circulation, as well as engaged in commercial activities, such as granting funding and credits to state-owned and private enterprises, institutions and citizens.
The Red Army occupied Latvia on 17 June 1940, and the country was incorporated into the USSR on 5 August. Credit institutions were nationalised and transformed into divisions of Latvijas Banka, but 10 October 1940 is considered the date of the legal liquidation of Latvijas Banka. As from that date, Latvijas Banka was replaced by the Latvian Republican Office of the State Bank of the USSR which started to operate as part of the centralised system of the USSR banks. The currency system of the USSR was gradually introduced in Latvia. Without prior notice to the population, the lats was withdrawn from monetary use on 25 March 1941.
As the independence movement intensified, the Supreme Council of the Latvian SSR adopted the law "On Banks" and the decision "On the Bank of Latvia" on 2 March 1990. It stipulated that Latvijas Banka shall be the local central bank, which is an independent national bank, the money-issuing centre, the bank of banks in relation to commercial banks, the organiser of cash execution of the government budget and economic regulator via monetary policy instruments. However, it was only after the adoption of the Declaration of the Restoration of the Independence of the Republic of Latvia on 4 May 1990 and the collapse of the USSR that based on the decision "On the Reorganisation of Banks in the Territory of the Republic of Latvia" of the Supreme Council of the Republic of Latvia of 3 September 1991, Latvijas Banka became a real central bank and the bank of issue.
The status of Latvijas Banka as the central bank and the bank of issue finally became established by the laws of the Republic of Latvia "On Banks" and "On the Bank of Latvia" adopted on 19 May 1992. It was the first time that independence of the national central bank from the government policy in Latvia was ensured by means of legislation.
Today, Latvijas Banka, acting in the public and economic interest, carries out several tasks significant for each and every inhabitant, financial markets and the public at large:
– participates in the formulation and implementation of the euro area's monetary policy;
– issues cash in Latvia and participates in ensuring the cash circulation process in the euro area;
– performs the functions of the single currency authentication centre – the National Analysis Centre and the Coin National Analysis Centre – ensuring authentication of suspicious banknotes and coins, as well as identification and analysis of counterfeits;
– maintains the interbank payment systems' infrastructure and promotes their smooth operation;
– manages the foreign reserves and other financial investments;
– acts as the financial agent of Latvia's government and provides financial services to other market participants;
– compiles and publishes financial, monetary and balance of payments statistics;
– maintains and develops the Credit Register;
– acts as an advisor to the Parliament and Cabinet of Ministers of the Republic of Latvia on monetary policy issues and other issues related to Latvijas Banka's operation.
Latvijas Banka promotes analysis and research of macroeconomic and financial issues, thereby laying a secure foundation for professional activities in these areas. The role of the leading industry expert helps Latvijas Banka raise public awareness of the development of the economy and the monetary system, the current situation and the economic policy being pursued. Latvijas Banka takes an active part in educating the general public on various economic topics.
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