Principal Causes of Financial Frises in Latvia for Last 20 Years

Abstract

In the article the author analyses activity of the Latvian banks with the purpose of search of ways from a crisis situation. In the middle of 2000th rapid development of crediting resulted in negative tendencies. It was assisted by not only superfluous liberalization of crediting but also decline of quality of supervision. Successful development of economy of Latvia in a great deal depends on stability of commercial banks that accumulated money resources. Besides the commission of market of finances and capital, successful development of the banking system in a great deal depends on activity of central bank and government. Therefore an exit from a financial crisis depends on Latvian commercial banks will be able to tide over financial difficulties and pick up thread crediting of enterprises. Secondly, on the basis of the analysis of events development in the banking area the Author discloses the true reasons which brought the Latvian economy to the deepest financial crisis among the countries of the European Union. The period from 1995 till 2014 is being investigated. The author uses a wide range of research methods, such as: grouping method, method of comparison of financial ratios, etc.