Panic fuels Latvian run on bank
- 12 December 2011
- From the section Business
More than 10,000 Latvians have withdrawn deposits from Swedish-owned Swedbank after rumours the firm was in financial difficulty.
The run on the bank started on Sunday, because of rumours that the bank was facing liquidity and legal problems in Estonia and Sweden.
The bank's chief executive in Latvia, Maris Mancinskis, has called the rumours "absurd".
He said Latvians had so far withdrawn 10m lats ($19.2m; £12m) from the bank.
The rumours, which were reportedly spread via social networks such as Twitter, come at a time of uncertainty in the country's banking system.
Customers of Latvia's 10th largest bank, Latvijas Krajbanka, were left without access to their money for days after the bank was put into liquidation. Regulators found large-scale fraud at the lender after its parent company in Lithuania was taken over by the government.
Swedbank said it was working to refill cash machines left empty by the withdrawals.
The Swedish bank has deposits of 1.6 billion lats ($3.1bn £1.9bn) in the Baltic state.
"These [withdrawals] won't impact our work in any way," Mr Mancinskis told LNT commercial television on Monday.
Police have reportedly launched an investigation into the source of the rumours.
Spreading false rumours which threaten the stability of the banking system is a criminal offence in Latvia, with a sentence of two years in jail.