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BANK

Latvia police probe targets Swedish banks

Aggressive methods employed by Swedish banks for collecting money from borrowers in Latvia are the subject of a police investigation, according to the Latvian prime minister.

Prime Minister Valdis Dombrovskis told the TT news agency authorities are looking into whether “a portion of the activities of certain Swedish banks” are so “aggressive” that they are pushing other claimants aside.

“We’re investigating certain methods when it comes to freezing companies’ accounts and taking over their deposits, quite aggressively I might add,” said Dombrovskis.

He explained that the Latvian state is one of the claimants which suffering because of the Swedish banks’ behaviour when borrowers become insolvent.

“Nearly the entire flow of money is being directed to the repayment of debts without any consideration for issues of tax payments and the like,” he said.

Dombrovskis says that there is “concern” over this sort of activity, but he doesn’t want to point out those involved because the investigation is ongoing.

According to information gathered by TT from police authorities, the accusations say that several banks have behaved in an “injurious” manner toward certain companies and that the actions may have been carried out to the benefit of other companies.

There is evidence of corruption in connection with loan collection, but according to Latvia’s financial inspection authority, FKTK, those allegations are included in the investigation.

Janis Placis, a section chief with FKTK, said that the agency has received a large number of complaints from companies that the banks have overstepped their authority.

“Most complaints have no grounds and the creditors attempt to reclaim loaned money is reasonable and logical,” he said.

The former government was also highly critical of Swedish-owned banks operating in Latvia.

It was political populism and it’s also populism now in an economic crisis, claimed a bank representative who wished to remain anonymous.

“It’s always the same time. Blame the foreigners! Blame the banks! And if you have a foreign banks there’s no doubt about who the scapegoat will be,” said the bank official.

Sweden’s major banks have been careful to comment on the Latvian police investigation.

Swedbank declined to comment at all, while SEB said that it had yet to be contacted by the Latvian police.

“Nordea is in Latvia to stay. We take care to build good relationships with our customers and decision makers. We naturally follow the rules which exist in the area,” said Nordea spokesperson Helena Östman to TT.

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BREXIT

Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
 
 
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
 
 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
 
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
 
Barclays and Coutts have also started contacting customers. 
 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
 
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said. 
 
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