The Central Bank of Latvia has decided to ease requirements for systemically important credit institutions by revising its approach to identifying other systemically important institutions (O-SIIs) and by recalibrating O-SII capital buffer rates. Following the 2025 assessment, Swedbank Baltics AS, Swedbank AS, AS SEB Banka and AS Citadele Banka were recognised as O-SIIs, while AS Rietumu Banka and BluOr Bank AS were removed from the O-SII list and will no longer have an O-SII buffer rate set. Alongside the updated O-SII list, the central bank revised the identification methodology to better fit countries with relatively smaller financial sectors and to reduce the influence of certain systemically insignificant transactions that can disproportionately affect systemic importance scores in such markets. It also changed the method for setting the O-SII buffer from an equal expected impact model to an interval approach, with SEB Banka and Citadele Banka each receiving a 0.25 percentage point reduction to 1.50% and 1.25% respectively, while Swedbank Baltics AS and Swedbank AS retain a 2.0% buffer of total risk exposure amount. The new requirements take effect on 22 December 2025, and the revised methodology and further details of the assessment are due to be published on the central bank’s website in the near future.
Central Bank of Latvia 2025-12-18
Central Bank of Latvia removes Rietumu Banka and BluOr Bank from O-SII list and lowers buffers to 1.50% for SEB Banka and 1.25% for Citadele Banka
The Central Bank of Latvia revised its approach to identifying other systemically important institutions (O-SIIs) and recalibrated O-SII capital buffer rates. Swedbank Baltics AS, Swedbank AS, AS SEB Banka, and AS Citadele Banka were recognized as O-SIIs, while AS Rietumu Banka and BluOr Bank AS were removed. The methodology now better suits smaller financial sectors, with SEB Banka and Citadele Banka receiving a 0.25 percentage point buffer reduction.