LATVIAN BANKS IN THE FINANCIAL CRISIS CONDITIONS

The author analyzes the performance of Latvian banks with a view to finding a way out of the crisis. The rapid development of lending in the mid -2000s led to negative trends in the banking market. Many banks are enthusiastic demand for bank credit. They provide loans at floating rates, which subsequently rose sharply. This has undermined the solvency of borrowers, which affected the liquidity of the banks. It was due not only excessive liberalization of lending to businesses and households, but also the decline in the quality of prudential supervision of banks by bank regulatory authorities. In addition to the commission of the financial and capital, the successful development of the banking system depends largely on the activities of the central bank and the government. The successful development of the Latvian economy is largely dependent on the stability of commercial banks, which have accumulated in their accounts cash resources. So out of the financial crisis is directly related to how well the commercial banks will be able to overcome the financial difficulties and resume lending to businesses.