WASHINGTON (Reuters) - Only a small fraction of the money seeping out of the banks in crisis-hit Cyprus ended up in Latvia during the first quarter of this year, Latvia’s central bank chief said on Thursday.
Latvia, a euro zone aspirant, has long positioned itself as an offshore bank center for its big neighbor Russia, and has seen the share of non-resident deposits in its banks rise in recent years.
But the country’s leaders have also sought to dispel notions that the Baltic country is similar to Cyprus, which was forced to ask for an international bailout after its banking sector neared collapse.
Ilmars Rimsevics, the president of the Bank of Latvia, said only about 100 million euros of Cypriot money ended up in Latvia in the first quarter of 2013, out of the 3 billion euros that fled the Mediterranean country.
And only a quarter of Latvia’s banks deal with non-resident deposits, he said.
“We’re working day in and day out in order to prove that we’re not Cyprus 2, we’re Latvia 1,” he said. Rimsevics was speaking at an event at the Heritage Foundation in Washington, where he was attending the semi-annual meetings of the International Monetary Fund and World Bank.
During Cyprus’s bailout, officials from the European Central Bank also contacted Latvia to warn authorities against taking in Russian money fleeing Cyprus -- or risk facing problems joining the euro zone next year, two sources familiar with the contacts told Reuters at the time.
Reporting by Anna Yukhananov; Editing by Tim Ahmann