The Board of the Bank of Lithuania considers its highest priority the restructuring of Ūkio bankas that would best guarantee further fulfilling of obligations to its clients, and would have the least influence on public finances. Such a provision was given to the temporary bank administrator, who has been ordered to assess, in no more than six days, the possibilities and means to restore the bank’s activities
“A lot will depend on the actual financial standing of the bank, which will be registered by the administrator and the auditors who inspect the bank, but our priority is clear—continuity of the operation of the bank in fulfilling obligations to its clients and ensuring that the restructuring would be the most effective, rational and cheapest means for the state in solving the problem,” said Vitas Vasiliauskas, the Chairman of the Board of the Bank of Lithuania, after a meeting with the temporary administrator of Ūkio bankas.
The Laws of the Republic of Lithuania lay down plenty of means to strengthen the stability of the financial system. The Republic of Lithuania Law on Financial Sustainability and the Law on Banks provide possibilities for the banks to render government guarantees, to transfer the problematic bank’s assets and obligations to another bank operating in Lithuania. The latter measure was adopted on 17 November 2011, when the Seimas approved the appropriate amendments to the Republic of Lithuania Law on Banks. In order to find the fastest way of solving this problem, the Bank of Lithuania intends to immediately begin consultations with other banks regarding their participation in the restructuring of Ūkio bankas.
Transferring of obligations and assets to another bank will be implemented if the administrator’s detailed analysis will show that such means of restructuring are the most economical and rational.
On 12 February the Board of the Bank of Lithuania authorised Adomas Audickas, the temporary administrator, to examine and assess the financial standing of Ūkio bankas, the possible means of re-establishing the stability and reliability of the operation of the bank, and solutions to the bank’s problems. The Bank of Lithuania must be presented with a conclusion and proposals, along with interim financial statements from the assessment of the financial standing. The conclusion and proposals, inter alia, must provide a comparative feasibility analysis, the likely expenses and benefits of the possible means of re-establishing the stability and reliability of the operation of the bank and the effective implementation of solutions for solving the bank’s other problems.
The Bank of Lithuania has indicated that the administrator’s conclusions on the re-establishment of the operation of Ūkio bankas must be presented within six days of being appointed. Taking into account the need to find a solution to the problem of Ūkio bankas in the most operative way, the Board of the Bank of Lithuania today called for the temporary administrator to present his conclusions and proposals as soon as possible.