OREANDA-NEWS. November 08, 2008. We would like to express our acknowledgement to Latvian Government's decision to revive the principles developed by the leaders of European Union member states, granting State support to the financial sector in the context of the global liquidity crunch, reported the press-centre of Parex banka.

The State support to the financial sector is not something extraordinary. Similar stability packages have been introduced in the vast majority of European Union member states, including, Sweden (46% of the total assets of Latvian banking sector accounts to financial institutions in Sweden), Germany, the United Kingdom, Hungary and others.

Parex banka is the largest independent financial institution with a local capital in Latvia, and today the Government has affirmed conditions, by which support to the Bank will be provided. Within the frameworks of the stabilisation package, Parex banka received the State guarantees for the its liabilities; thereby, enabling the Bank to preserve the liquidity at a sustainable level, and obviating possible doubts on the Bank's capabilities of raising funds in the international debt markets.

The State support has been granted on the basis of business provision, meaning that the shareholders of the Bank take certain obligations in favour of the State. In accordance with the terms of the agreement between the Bank and the Latvian State, 51% of Parex banka's shares are being sold to the State, with existing shareholders having the rights to buy out the stakes.

„We fully recognise the correctness both of our and the State actions. The current cooperation model will help both our clients, shareholders and the management. Our clients, who have entrusted their funds to the Bank, will support the Government's actions, as Parex banka has been repeatedly demonstrating the timeliness of its actions for over the 20 years of its existence,” the Chairman of Parex banka's Council Guntars Grinbergs says.