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After the presentation in the Seimas, 56 deputies voted in favor of the conclusions, 25 against and 9 abstentions.
“An unsustainable model of bank financing, double dependence on external financing, especially short-term financing, when money was loaned to parent banks in the short term, when secondary banks were financed for a short period and were lent in international markets ” This was an essential element of the crisis, which caused those processes that were deepened by certain fiscal actions, not very responsible in the years before the crisis, the debt conditions and the like, “said Stasys Jakeliūnas, one of the authors of the conclusions.
“Banking supervision was also inadequate, although it was formally in line with current international practice at the time, but clearly not sufficient,” he continued.
The former chairman of the committee recommended thinking about establishing a state bank.
“It is gratifying that the President of the Republic of Lithuania, who has a job at a commercial bank, sees the need for a well-managed and supervised commercial or state development bank that can be used to support and stabilize the economy, guarantee the flow credit to sustainable companies “. they are afraid, “said S. Jakeliūnas.
“So far, commercial banks appear to be behaving more responsibly than in 2008-2009, but what will happen later this year or next is unknown,” he added.
According to the former president of BFK, it is necessary to monitor the activities of banks in the current period of crisis.
“The role of banks is particularly important and we must make sure that the crisis or the virus does not re-enter the banking system, which is very risky,” he said.
Jakeliūnas also said that he regretted that Lithuania had not adopted the euro in 2007.
Deputy Mykolas Majauskas said that studying the causes of the crisis is of no use.
“Now there is a crisis around the corner, you must help people, companies and you are doing unprofitable and unproductive work. It is unfortunate,” said M. Majauskas at Seimas.
Valius Ąžuolas, the current president of the BFK, said that the investigation of the crisis made it possible to avoid the mistakes made before.
“This crisis study has achieved its objective: it has learned from the mistakes that were made then. An example is the current Government, the Minister of Finance for three years in responsible budgets and stocks, which was not the case during previous crises. These Actions now help form a certain pillow when we come out of the crisis, ”said V. Ąžuolas.
The findings indicate that the Bank of Lithuania deliberately or unconsciously allowed banks to transfer many risks to other market participants, mostly non-professionals, and without restricting the cheap, speculative and excessive financing of parent banks, tolerated unequal conditions of competition for local banks.
Reportedly despite emerging property bubbles, economic imbalances and distorted economic structure, the Bank of Lithuania tolerated the aggressive and risk-averse competitive struggle of Scandinavian banks for market share and allowed these banks to take the total control of monetary policy.
The study also highlights that the Baltic banking systems and economies have been structurally vulnerable to double dependence on external financing (national banks from parent banks and these from international markets). The three Baltic countries stood out with the highest dependency, and the credit markets of these countries were dominated by banks from one country, Sweden. Therefore, according to the conclusions, the exceptionally deep crisis in Lithuania is primarily the responsibility of the Swedish banks and their subsidiaries, as well as the supervisory authorities of Lithuania and Sweden.
The fact that Lithuania did not adopt the euro in 2007 also exacerbated the crisis due to an increased risk of devaluation of litas, a sharp rise in interest rates on litas, which worsened the financial condition of several tens of thousands of households, as well as well as the companies that took loans in litas. written in the conclusions.
The fact that in 2006-2008 the Government operated under conditions of a minority, as well as the Seimas elections held in the fall of 2008, according to the conclusions, hindered at least a partial preparation for the beginning of the crisis.
In the recommendations, the BFK suggests that the Government consider establishing a supervisory authority for financial services and consumer rights independent of the central bank, and fully examine the possibility of reducing the permissible level of market concentration. banking.
Crisis researchers are proposing a feasibility study for a state-run commercial bank focused on a package of basic financial services to provide credit to the population, businesses, the government, and other financial services.
The investigation of the crisis is criticized by the opposition, and the President of the Board of the Bank of Lithuania, Vitas Vasiliauskas, has said that this is the practice of “financial archeology”.
Bank of Lithuania: information at the conclusion of the 2008–2009 crisis study is presented selectively, evaluations are misleading
The Bank of Lithuania (LB) claims that the information in the research results is presented selectively and the evaluations are misleading.
“We note that the information in the study report is presented selectively, without taking into account certain calculations and facts provided to the Committee (Budget and Finance – ELTA). The evaluations presented are erroneous and misleading, not based on objective data provided to the committee, but in unilateral preliminary opinions and interpretations, without indicating important important arguments, “said the letter sent to Seimas members.
According to the authority, the witnesses interviewed during the study were “selectively selected, deliberately ignoring experts who worked not only on a theoretical level but also on a practical level with the issues at stake.”
According to LAC, neither the heads of commercial banks nor the authorized representatives of banks, responsible for establishing and presenting interbank interest rate quotes during the crisis, were invited to testify before the committee, nor were they experts from the Bank of Lithuania. , except for a former ALC employee. The authorities had a preliminary opinion.
The Authority also notes that the material and results of the investigation, if accepted, will mislead the public, as the information at the conclusion of the investigation is unilateral.
“For example, an increase in interest rates on loans and deposits during a crisis is evaluated by selectively emphasizing the consequences of a single type of increase in the interest rate. In other words, although the interest rates on loans and deposits in litas they increased to a similar level, the higher interest paid by loan holders is emphasized, despite the fact that another group in society, depositors, had a similar increase in interest rates at an aggregate level, “said the letter. .
According to the Bank of Lithuania, the conclusion of the investigation “deliberately ignores the calculations made by the Bank of Lithuania at the request of the committee itself and other information provided when it does not correspond to the pre-formulated narrative.”
“For example, despite revised calculations provided by the Bank of Lithuania at the request of the committee, which were obtained by starting an additional microdata analysis, the committee study tends to indicate higher interest rate overpayments of borrowers based on rough assumptions, “the central bank said.
The letter also states that the information provided in the investigative material does not substantially correspond to the circumstances regarding LB’s functions over the past decade.
“Although the Bank of Lithuania did not receive mandates for the supervision of financial services and the implementation of macroprudential policy in Lithuania before the financial crisis, the research material presupposes that the Bank of Lithuania should have acted in accordance with those mandates. Second, following the change in management of the Bank of Lithuania, macroprudential measures were introduced in 2011 and 2015 to limit excessive and irresponsible lending, and the Bank of Lithuania was given a macroprudential policy mandate in 2014, “says LB .
No part of this publication may be reproduced without the written permission of ELTA.
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