Bloomberg News

Lithuanian Central Banker Sees ‘No Panic’ After Takeover

November 18, 2011

(Updates with comment from central bank governor in fourth paragraph.)

Nov. 18 (Bloomberg) -- Lithuanian central bank board member Vaidievutis Geralavicius said he has seen no “signs of panic” after the government took over the Baltic country’s fifth- largest lender.

“We were rather surprised to see stability,” Geralavicius told reporters today in the capital, Vilnius. “There was no run on deposits.”

The government took over AB Bankas Snoras on Nov. 16 after the central bank discovered that hundreds of millions of dollars in assets may be missing and the bank was at risk of insolvency. Some securities reported as assets by the bank do not exist, the regulator said.

Lawmakers approved legislation yesterday allowing the government to split Snoras into two banks, with good and bad assets.

The bad bank will be administered under the bankruptcy procedure, central bank Governor Vitas Vasiliauskas said today in an online interview with Delfi. The good bank will resume operations and the government will seek to sell it to an investor.

The regulator plans to announce more details and determine restrictions on operations on Nov. 20.

--Editors: Andrew Langley, Douglas Lytle

To contact the reporter on this story: Milda Seputyte in Vilnius at mseputyte@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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