Latvia’s Ministry of Finance reported on a meeting of the Financial Sector Development Council, chaired by Prime Minister Evika Siliņa, which reviewed the development of the lending environment and the impact of recent legal amendments intended to simplify refinancing for individuals. The Council also launched a discussion on possible further action to adjust the regulatory framework for refinancing loans to legal persons, with the aim of strengthening competition among lenders and improving borrower mobility. Latvijas Banka presented updated lending indicators, highlighting that the low point in lending activity has passed and that lending growth is outpacing economic indicators. In 2024 Q4 and 2025 Q1, Latvia recorded the euro area’s fifth-highest annual growth rate in the non-financial private sector loan portfolio, with the credit portfolio rising to 29.3% of GDP and corporate lending growth exceeding 8% per year. The Council also discussed the joint MONEYVAL and Financial Action Task Force (FATF) plenary that adopted Latvia’s sixth-round mutual evaluation report, noting Latvia was the first country assessed under the revised FATF methodology. Commercial banks are expected to submit proposals in the near term on steps to improve companies’ ability to switch lenders, feeding into potential next measures on corporate loan refinancing.

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