The Bank of Latvia (Latvian: Latvijas Banka,) is the central bank of Latvia. It is among the nation's key public institutions and carries out economic functions as prescribed by law. It was established in 1922.The principal objective of the Bank of Latvia is to regulate currency in circulation by implementing monetary policy to maintain price stability in Latvia. Until 31 December 2013, the bank was responsible for issuing the former Latvian currency, the lats. The Bank of Latvia administration is located in Riga. The fiscal year for the bank begins on 1 January and ends on 31 December.
We study heterogeneity in households' credit across nine European countries (Belgium, Spain, Hungary, Ireland, Italy, Latvia, Lithuania, Portugal, and Slovakia) during 2022-24 using granular credit register data. We first document substantial between- and within-country variation in mortgage and consumer lending by borrower age, loan maturity, and interest rate fixation. We then quantify the pass-through of the ECB's recent tightening cycle to household borrowing costs, and assess its heterogeneous impact across households. Pass-through is nearly complete for mortgages (around 0.9) but considerably weaker for consumer credit (around 0.4). While mortgage pass-through is relatively homogeneous across countries, consumer credit shows pronounced cross-country differences that cannot be explained by borrower or loan characteristics. Younger households face stronger mortgage pass-through but weaker consumer credit pass-through relative to older borrowers, and longer maturities are associated with stronger pass-through in both credit markets.
This paper examines the effects of macroeconomic and budget balance shocks on public debt trajectories in the euro area. Country-specific SVAR models are used to identify various shocks, which are subsequently incorporated into local projection models that use panel data to estimate the impulse responses. The analysis indicates that a positive GDP shock leads to a persistent decline in the debt-to-GDP ratio, while a positive GDP deflator shock reduces the debt ratio only temporarily. A positive interest rate shock results in a substantial and lasting increase in the debt ratio. A positive primary balance shock lowers the debt ratio considerably, albeit with a lag of around one year. There is evidence of state-dependent and non-linear effects. A positive primary balance shock is more effective in reducing debt after periods of economic expansion than after recessions, and more effective when the initial public debt is low than when it is high. Moreover, a positive GDP shock reduces the debt stock to a larger extent when the debt stock is large than when it is low.
This study is the first to investigate the impact of the term structure of public debt on fiscal sustainability. We adopt the widely used backward-looking measure of fiscal sustainability-fiscal responsiveness as proposed by Bohn. Using data from De Graeve and Mazzolini and focusing on a sample of 19 most developed countries, we demonstrate that sovereign borrowing with maturity above 10 years significantly reduces fiscal responsiveness. Conversely, public debt with maturity between 3 and 5 years is associated with the highest responsiveness of the primary balance to public debt. The findings indicate that the increase of long-term public debt since the beginning of this century has contributed to reducing fiscal responsiveness by half. Furthermore, unconventional monetary policy, by suppressing yields at longer maturities, has likely played a key role in the discovered relationship.
Digital transformation in the financial sector has increased dependence on information and communication technology (ICT) third-party service providers, creating concentration risk and resilience challenges. This paper proposes a quantitative method for measuring concentration risk using Register of Information (RoI) data required under the Digital Operational Resilience Act (DORA). As standardised reporting does not provide calculation approaches for quantifying concentration risk, this paper addresses the gap by developing a method that measures: (1) provider dependence, (2) service-type concentration and (3) subcontracting exposure. The method structures dependencies between providers, ICT service types and subcontracting levels and links them to critical or important functions. It also applies risk weights based on substitutability and impact of discontinuation. The results show that RoI data can be used not only as a compliance artefact, but also as a computable dependency model that supports residual risk assessment and mitigation prioritisation.
The study analyses the impact of issuer announcement sentiment on the dynamics of share prices in the Nasdaq Baltic Markets in 2018–2023. Analysis shows that Loughran and McDonald dictionary performs the best in explaining the issuer announcement sentiment among the dictionaries we tested and that the sentiment has become more positive over time. To evaluate the relationship between the share price dynamics and the issuer announcement sentiment, we use panel data econometric models. Our results demonstrate that negative sentiment is more related to share price dynamics than positive sentiment. In addition, extremely negative sentiment values are more influential than moderately toned announcements. Besides sentiment, technical price indicators, financial market and macroeconomic indicators, and financials also can be important explanatory factors of stock returns. Our results are consistent with several robustness tests.
