Central Bank Independence in Transition Economies

7D. Banking Supervision and Exchange Rate Policy 

The Bank is responsible for banking supervision (Art. 17). The NBK formulates 

and implements the exchange rate policy (Art. 9). 

 

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W. Maliszewski 

CASE Foundation 

44

8. Latvia

10

 

The Bank of Latvia (BL) was established in 1922 and existed until 1940. The 

Bank was restored de jure in March 1990 and started its operations in September 1991, 

after the declaration of independence of the Republic of Latvia and collapse of the 

USSR. The law "On the Bank of Latvia" was passed by Parliament in May 1992.  

8A. Governing Bodies and Financial Management 

The Bank is administered by a Board of Governors and an Executive Board. The 

Board of Governor consists of the Governor, Deputy Governor and six other members. 

The Governor is appointed by the Parliament on the recommendation of its 

Chairperson. According to the amendment, passed in June 1997, the Governor is 

appointed by the Parliament on the recommendation of its (at least) ten members. The 

Deputy Governor and other members are appointed by the Parliament on the 

recommendation of the Governor. All members are appointed for six years term and, 

by the amendment of June 1997, can be dismissed on his own request and in case of 

crime or inability to perform his duties for more than six month (Art. 22). The 

conditions The Board of Governors reviews and approves the annual budget of the 

bank and determines the salaries of the Boards' members and other employees. (Art. 

26, 30). The Executive Board, consisting of six person from the Bank's senior 

management, is established by the Board of Governors to run the Bank on a day-to-

day basis. The Chairperson of this Board is appointed by the Board of Governors on 

the recommendation of the Governor, other members are nominated by the Board of 

Governors on the recommendation of the Chairperson. The members of the Executive 

Board can be dismissed by the Board of Governors (Art. 23). The members of the 

Board of Governors and the Executive Board may not “hold more than one paid 

position simultaneously” (Art. 31).