European Central Bank Says Latvia's ABLV Is Failing

A security guard speaks on her mobile phone at the head office of the ABLV Bank in Riga, Latvia February 18, 2018. REUTERS/Ints Kalnins/File Photo
A security guard speaks on her mobile phone at the head office of the ABLV Bank in Riga, Latvia February 18, 2018. REUTERS/Ints Kalnins/File Photo
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European Central Bank Says Latvia's ABLV Is Failing

A security guard speaks on her mobile phone at the head office of the ABLV Bank in Riga, Latvia February 18, 2018. REUTERS/Ints Kalnins/File Photo
A security guard speaks on her mobile phone at the head office of the ABLV Bank in Riga, Latvia February 18, 2018. REUTERS/Ints Kalnins/File Photo

Latvia’s ABLV Bank is failing or likely to fail and will be wound up as saving it is not in the public interest, the European Union’s Single Resolution Board and the European Central Bank (ECB) said separately on Saturday.

Latvia's financial regulator on Monday ordered ABLV, Latvia's third-largest bank by assets, to cease all payments at the ECB's request amid US accusations of money laundering and breaching sanctions on North Korea. The order came after the bank saw an abrupt wave of withdrawals and was unable to access US dollar funding.

The European Central Bank said in a statement on Saturday that it has concluded ABLV is "failing or likely to fail," along with a Luxembourg-based subsidiary, ABLV Bank Luxembourg,

"Due to the significant deterioration of its liquidity, the bank is likely unable to pay its debts or other liabilities as they fall due," the ECB said. "The bank did not have sufficient funds which are immediately available to withstand stressed outflows of deposits before the payout procedure of the Latvian deposit guarantee fund starts."

It said Europe's Single Resolution Board determined that action on its part "was not in the public interest," so the bank will be dissolved under Latvian law and the Luxembourg subsidiary under that country's law.

It said Europe's Single Resolution Board determined that action on its part "was not in the public interest," so the bank will be dissolved under Latvian law and the Luxembourg subsidiary under that country's law.

Deposits in ABLV, which was founded in 1993, are protected up to 100,000 euros ($123,000) by a deposit guarantee fund in Latvia, the ECB said. At the end of last year's third quarter, it reported deposits of 2.67 billion euros ($3.28 billion) and assets of 3.63 billion euros ($4.4 billion.)

Latvian Prime Minister Maris Kucinskis said his government won't put any taxpayer money into rescuing ABLV.

"I am convinced of both the stability of the financial sector of Latvia and the ability to take major steps to ensure that the banking sector regains its reputation," Kucinskis said in a statement. He said a supervisory board for the country's financial sector will hold a special meeting Monday.

The US money laundering accusations, denied by the bank, destabilized the lender and around 600 million euros worth of deposits left within days, forcing the ECB to suspend all payments on Monday to prevent a disorderly collapse.

The Resolution Board noted ABLV does not provide critical functions and its failure is not expected to have a significant adverse impact on financial stability.

ABLV said it had fulfilled its regulatory requirements but was not allowed to resume operations due to “political considerations.” Latvian authorities will gather for an emergency meeting on Monday following the failure of the country’s third-largest bank, the Prime minister said on Saturday, as the country kept watch for any fallout on other banks.

“The bank emphasizes: the amount of its assets is sufficient to satisfy demands of all clients and creditors. All deposits guaranteed by the Deposit Guarantee Law shall be disbursed with the funds of ABLV Bank,” it said in a statement.

The bank, like many others in Latvia, has sizable deposits from foreign clients, many from Russia and Ukraine. Around 40 percent of all bank deposits in the Baltic country are from non-residents, and international agencies have long warned that some are related to illegal activities.

To combat money laundering, Latvia announced plans on Friday to gradually halve the share of bank deposits held by non-residents. But that was not enough to save ABLV, which had until Friday to present the ECB with a credible survival plan or face closure.

Hinting at its eventual fate, Latvian Finance Minister Dana Reizniece-Ozola said the state would not step in to rescue ABLV if it were about to collapse.

“ABLV is not regarded as a systemic bank, which means the government would not rescue it because its exposure to the Latvian economy is low,” Reizniece-Ozola said. “There is some systemic importance (but) ... it is not crucial or critical.”



US Close to Several Trade Deals, Announcements to be Made in Next Days, Bessent Says

US Treasury Secretary Scott Bessent speaks to reporters at the US Capitol as Republican lawmakers struggle to pass US President Donald Trump’s sweeping spending and tax bill, on Capitol Hill in Washington, D.C., US, June 27, 2025. REUTERS/Elizabeth Frantz/File Photo
US Treasury Secretary Scott Bessent speaks to reporters at the US Capitol as Republican lawmakers struggle to pass US President Donald Trump’s sweeping spending and tax bill, on Capitol Hill in Washington, D.C., US, June 27, 2025. REUTERS/Elizabeth Frantz/File Photo
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US Close to Several Trade Deals, Announcements to be Made in Next Days, Bessent Says

US Treasury Secretary Scott Bessent speaks to reporters at the US Capitol as Republican lawmakers struggle to pass US President Donald Trump’s sweeping spending and tax bill, on Capitol Hill in Washington, D.C., US, June 27, 2025. REUTERS/Elizabeth Frantz/File Photo
US Treasury Secretary Scott Bessent speaks to reporters at the US Capitol as Republican lawmakers struggle to pass US President Donald Trump’s sweeping spending and tax bill, on Capitol Hill in Washington, D.C., US, June 27, 2025. REUTERS/Elizabeth Frantz/File Photo

The United States is close to clinching several trade deals ahead of a July 9 deadline when higher tariffs kick in, US Treasury Secretary Scott Bessent said on Sunday, predicting several big announcements in coming days.

Bessent told CNN's "State of the Union" the Trump administration would also send out letters to 100 smaller countries with whom the US doesn't have much trade, notifying them that they would face higher tariff rates first set on April 2 and then suspended until July 9.

"President Trump's going to be sending letters to some of our trading partners saying that if you don't move things along, then on August 1 you will boomerang back to your April 2 tariff level. So I think we're going to see a lot of deals very quickly," Bessent said.

Bessent denied that August 1 was a new deadline for negotiations. "We are saying this is when it's happening. If you want to speed things up, have at it. If you want to go back to the old rate, that's your choice," he told CNN, Reuters reported.

The US Treasury chief said the Trump administration was focused on 18 important trading partners that account for 95% of the US trade deficit. But he said there had been "a lot of foot-dragging" among countries in getting closure on a trade deal.

He declined to name countries that were close to a trade agreement, adding, "because I don't want to let them off the hook."

Trump has repeatedly said India is close to signing a deal and expressed hope that an agreement could be reached with the European Union, while casting doubt on a deal with Japan.

Since taking office, the US president has set off a global trade war that has upended financial markets and sent policymakers scrambling to guard their economies, including through deals with the US and other countries.

Trump on April 2 announced a 10% base tariff rate and additional amounts for most countries, some ranging as high as 50%. The news roiled financial markets, prompting Trump to suspend all but the 10% base rate for 90 days to allow more time for negotiations to secure deals, but the process has proven more challenging than expected.

That period ends on July 9, although Trump early on Friday said the tariffs could be even higher - ranging up to 70% - with most set to go into effect August 1.

Bessent, asked about the 70% rate, referred back to the April 2 list, but that did not include such high rates.