Bank of Lithuania

The Bank of Lithuania started operating in 1922. Its first Governor, appointed by decree of the President of the Republic of Lithuania, was Prof Vladas Jurgutis, who headed the Bank until 1929. Later, it was governed by Vladas Stašinskas (1930–1939), Juozas Tūbelis (1939), and Juozas Paknys (1939–1940).

Re-established on 1 March 1990, the Bank of Lithuania continued the traditions of the country’s central bank that had already been operating in the interwar period, starting its operations after the restoration of Independence of the State of Lithuania. It was first governed by Bronius Povilaitis (1990), Vilius Baldišis (1990–1993), Romualdas Visokavičius (1993), Kazys Ratkevičius (1993–1996), and Reinoldijus Šarkinas (1996–2011). Currently, the Chair of the Bank of Lithuania is Vitas Vasiliauskas (since 2011).

2017

Present

Ambitious four-year goals

On 10 January 2017, the Board of the Bank of Lithuania approved the strategic activity directions for the upcoming four years, setting specific objectives. After implementing them, the Bank of Lithuania would become one of the most effective central banks in the Nordic-Baltic region.

2017

In 2017–2020, the Bank of Lithuania will strengthen its role as a centre of excellence in economics and finance, work towards creating a competitive and innovative payments market in Lithuania, as well as aim to earn maximum return on investments in order to cover operational costs and transfer profits earned to the State Budget. The Bank of Lithuania plans to become a financial sector partner encouraging innovations and sustainable financial market growth. More information is available on the Bank of Lithuania website.

Joining the Single Euro Payments Area

On 1 January 2016, Lithuania joined the Single Euro Payments Area, also called SEPA, which encompasses 34 countries.

2016

In the field of payments, SEPA is the second major step in creating a single payments market in Europe. In Lithuania, the first step in that direction was made with the adoption of the euro: now, without using currency exchange services, we can pay in euro banknotes and coins in 19 euro area countries. Nearly 15 years were dedicated for the preparation to migrate to SEPA – a project that is essentially changing the electronic payments market in the EU, as payments in euro are no longer classified into domestic and cross-border.

Part of the Eurosystem

With Lithuania joining the euro area on 1 January 2015, the Bank of Lithuania became part of the Eurosystem.

2015

Together with the ECB and the central banks of 18 other euro area countries, we participate in the establishment and implementation of euro area monetary policy, management of the ECB official foreign reserves, supervision of euro area banks and the decision-making process related to other important financial issues. As part of the Eurosystem, Lithuania’s central bank is entitled to a share of the ECB profit and income earned on account of the Eurosystem monetary policy, which is proportional to the Bank of Lithuania’s share in the ECB’s paid-up capital.

ECB photo: Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, together with other members of the ECB Governing Council.

Single European currency adopted in Lithuania

On 1 January 2015, in place of its national currency – the litas – Lithuania adopted the euro, the single European currency.

2015

Now the Lithuanian population, like more than 300 million people in 19 different countries, may use euro banknotes and coins as legal tender across the euro area. The adoption of the euro was a prerequisite for becoming part of the EU: it took nearly a decade for our country to comply with the euro adoption requirements and prepare for the introduction of the new currency.

Photo: Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, withdrawing the first euro banknote from an ATM in Vilnius city centre on the night of the euro adoption.

Euro banknote deliveries

On 23 October 2014, in preparation for the adoption of the single currency, the first shipment of euro banknotes was flown to Vilnius Airport, another one landed in Kaunas Airport on 29 October.

2014

The successful banknote deliveries to Bank of Lithuania vaults in two of the country’s major cities paved the way for their distribution across Lithuania. To satisfy the potential need for banknotes at that time and ensure sufficient reserves, by the end of 2014 the Bank of Lithuania brought, in total, 132 million banknotes, weighing 114 tonnes. Euro banknotes in all denominations were obtained from the central bank of Germany – Bundesbank.

Governor of ECB presented the Euro Star

On 25 September 2014, Mario Draghi, Governor of the ECB, visited the Bank of Lithuania.

2014

This was his first visit to our country. Mr Draghi took part in ‘The Euro in Lithuania: One Market, One Currency, Common Future’, a conference organised in Vilnius and dedicated to the euro adoption, where he presented Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, with a symbolic euro star, which is traditionally gifted to the central bank of a country joining the euro area.

Visit by the Managing Director of the International Monetary Fund

On 18 July 2013, Christine Lagarde, Managing Director of the International Monetary Fund (IMF), visited Vilnius.

2013

She met with Members of the Board of the Bank of Lithuania and shared insights at ‘European Economic Integration: Stock Taking of Challenges and Possibilities’, a round-table discussion organised by the Bank of Lithuania. The last visit of an official of such rank was in 1997, when Michel Camdessus, the then-Head of the IMF, came to Lithuania.

Litas shipment

On 23 May 2012, for the first and last time, a shipment of new litas banknotes, printed in Western Europe, reached Lithuania by air.

2012

Printed by the French company Oberthur Technologies, 2007-issue 10 and 20 litas and 1997-issue 200 litas banknotes were flown to Vilnius from Lyon (France). The supplemented litas reserves lasted the Bank of Lithuania until the adoption of the euro. Prior to this, litas banknotes that were printed in the USA, Germany, and France would first reach the port of Klaipėda and only then be transferred to the Bank of Lithuania vaults.

Photo: LitCargus

New management model

On 2 January 2012, having implemented a new financial markets supervision model, the Bank of Lithuania established the Supervision Service, which focused on the supervision of financial institutions (previously under three state institutions) as well as the settlement of disputes between consumers and financial institutions.

2012

To bring in a structural shift, the Bank of Lithuania set up three more specialised services (Economics and Financial Stability, Banking, Cash Management) aimed to execute the key functions of the Bank. Ancillary functions were concentrated at the Organization Service and several autonomous divisions, while cash management – at the Vilnius and Kaunas units, closing down the division in Klaipėda. The new business model minimised the organisation’s administrative infrastructure and related costs.

Photo: employess of the Bank of Lithuania Klaipėda Division on their last day of work (31 December 2012).

More reliable banking system

In November 2011, the Board of the Bank of Lithuania recognised AB bankas SNORAS as insolvent and applied to the Vilnius District Court regarding the opening of bankruptcy proceedings.

2011

With the court initiating these proceedings, SNORAS bank had its operating license, issued by the Bank of Lithuania, permanently revoked. In February 2013, the operating license of UAB Ūkio bankas was revoked. With timely identification and reigning in of risks to financial stability, which arose as a result of these banks’ financial performance failures (and even possible criminal actions of their owners), the domestic banking system became more transparent and reliable.

Break with tradition – open doors

On 2 October 2011, for six hours the Bank of Lithuania Vilnius building welcomed a stream of people, seizing the opportunity to see inside the Bank during the first-time event ‘Bank of Lithuania – Open Doors’. The number of visitors reached almost 5,000.

2011

Global catalogue cover features 10 litas banknote

In 2009, Krause Publications (USA), one of the largest publishing houses in the world, printed the obverse of the 10 litas banknote on the cover of the 15th edition of its catalogue World Paper Money (issued from 1961).

2009

The banknote, designed by Giedrius Jonaitis, featured pilots Steponas Darius and Stasys Girėnas, who embarked upon a legendary yet tragic Trans-Atlantic flight. Detailed information on the banknote was presented in a catalogue and a special CD, which introduced to the world Lithuania, its central bank, and the money that it issued into circulation.

Joining the Eurosystem payments system TARGET2

On 19 November 2007, the Bank of Lithuania, together with seven other central banks, joined TARGET2, a Eurosystem payment system, which began operating on the same day, allowing the country’s financial institutions to make real-time settlements in euro.

2007

This was a significant and necessary step towards the preparation for the adoption of the single European currency and joining the euro area. Besides Lithuania, the first migration wave also included the central banks of Austria, Cyprus, Latvia, Luxembourg, Malta, Slovenia and Germany, as well as TARGET2 users in those countries.

Vytis on Lithuanian euro coins

On 11 November 2004, the Board of the Bank of Lithuania decided how the Lithuanian circulation coins featuring the Vytis would be used once our country adopted the single European currency.

2004

The coins were minted on the basis of plaster models created by sculptor Antanas Žukauskas, winner of an open tender for the design of the euro coin, announced by the Bank of Lithuania. Fourteen authors and co-authors participated in the tender, submitting 54 plaster models for the national side of the 1, 2, 5, 10, 20 and 50 euro cent coins as well as €1 and €2 coins.

In the European System of Central Banks

Upon Lithuania’s accession to the EU on 1 May 2014, the Bank of Lithuania became a member of the European System of Central Banks, which consists of the ECB and the national central banks of all EU Member States.

2004

This led to closer cooperation in adopting decisions on the procedure for the national central bank’s operations, statistics, accounting, etc.

Photo: Former ECB headquarters in Frankfurt am Main (Germany), where representatives from the Bank of Lithuania, together with colleagues from other EU national central banks, tackled relevant financial issues.

First global recognition of a Lithuanian coin

At the Coin of the Year (COTY) awards in 2002 in Osaka (Japan), the Bank of Lithuania enjoyed acclaim with its 50 litas silver coin, issued in 2000.

2002

The coin was dedicated to the XXVII Olympic Games in Sydney, Australia (designed by Antanas Žukauskas). Krause Publications (USA), a publisher of numismatic catalogues, awarded it first place in the ‘Most Artistic Coin’ category. This was the first Bank of Lithuania commemorative coin to garner international praise. Ten more Lithuanian commemorative litas coins have been awarded international prizes.

Litas pegged to the euro

On 2 February 2002, the anchor currency of the litas became the euro, and the official exchange rate of the litas was LTL 3.4528 for EUR 1.

2002

This decision was taken by the Board of the Bank of Lithuania, in coordination with the Government, due to Lithuania’s expanding economic relations with EU countries and respective shifts in the currency structure of trading. In re-orientating the litas from the US dollar to the euro, respective amendments to the Law on the Credibility of the Litas were made. The currency board arrangement embedded therein was effective until the adoption of the euro. For two decades, the Bank of Lithuania had maintained a stable rate of the litas against its anchor currencies – the US dollar and the euro, firmly rebuffing speculations on the devaluation of the litas.

Vladas Jurgutis award

In 1997, emphasising the importance of central banking and wishing to perpetuate the merits of Prof Vladas Jurgutis, the first Governor of the Bank of Lithuania, to banking in Lithuania, the Board of the Bank of Lithuania introduced the Vladas Jurgutis Award.

1997

The award is presented for significant scientific work in the fields of Lithuanian banking, finances, money and macroeconomics. The first person to receive the award in 1997 was Prof Alfonsas Žilėnas, who earned it for his acclaimed work in banking and finances. In 2016, to commemorate the 95th birth anniversary of Žilėnas, the Bank of Lithuania issued a book titled Finansų mokslo ąžuolas Alfonsas Žilėnas: prisiminimai, rankraščiai, bibliografija (Alfonsas Žilėnas, Forefather of Financial Sciences: Memories, Manuscripts, Bibliography).

Foreign banks enter the country

In 1997, the first foreign bank entered Lithuania’s banking sector – the Polish Kredyt Bank division was established in Vilnius.

1997

Following its lead, banks from Scandinavia, Germany and France came to Lithuania as well. The inflow of foreign capital, mergers of smaller commercial banks, the more conservative approach of banks towards lending and stricter control over commercial banks strengthened the domestic banking system, which had recovered after the first banking crisis.

Banking crisis

The outbreak of a systemic banking crisis in 1994 was a serious hit on the economic and financial system of the country.

1994

In early 1996, 27 commercial banks were registered with the Bank of Lithuania; however, only 12 commercial banks and the Lithuanian Development Bank were in full operation – the rest experienced financial problems and had their activities terminated. By 1997, licences were revoked for 13 banks, leading to the institution of bankruptcy proceedings.

Law on the Bank of Lithuania

On 1 December 1994, the Seimas of the Republic of Lithuania adopted the Law on the Bank of Lithuania.

1994

Union of the litas and US dollar

In 1994, under the Law on the Credibility of the Litas, the litas was pegged to the US dollar at the fixed exchange rate of 4:1. The Law also stipulated that the litas, issued by the Bank of Lithuania, was to be 100 per cent backed with gold and convertible currency reserves.

1994

Such a decision was taken seeking to ensure relative price stability in the longer period.

Photo by Eugenijus Strioga from the Bank of Lithuania Money Museum publication 'Money in Photography' (2002).

Second rebirth of the litas

On 25 June 1993, litas and centas coins were issued into circulation. The litas once again reappeared in Lithuania after more than 50 years. It had been used as the national currency in the Republic of Lithuania in 1922–1940.

1993

Coin mintage at the Lithuanian Mint

On 30 September 1992, the Lithuanian Mint began to mint circulation 1, 2, and 5 centas coins. Since then, by order of the Bank of Lithuania, all Lithuanian circulation and commemorative coins are minted at the Lithuanian Mint in Vilnius.

1992

Membership in the International Monetary Fund

On 29 April 1992, the Bank of Lithuania joined the International Monetary Fund.

1992

It is the largest financial organisation in the world, uniting 189 countries. The organisation was established at the UN conference in Bretton Woods, USA, in July 1944. On 21 October 1992, the Bank of Lithuania was granted the first loan from the International Monetary Fund to support the stability of the litas and maintain international reserves.

Creation of the national currency system

On 1 October 1992, the only legal tender in Lithuania was the national monetary unit known as talonas. Its entering into circulation terminated the turnover of the rouble.

1992

The national currency system was established and the Bank of Lithuania was able to start the implementation of independent monetary policy and perform other central bank functions.

Opting out of commercial functions

On 1 September 1992, the Bank of Lithuania abandoned its commercial functions, which were uncharacteristic of modern central banks, transferring these functions and its divisions in various cities (taken over from the Soviet banks) to the Lithuanian State Commercial Bank. The only Bank of Lithuania divisions that remained were located in Vilnius, Kaunas, and Klaipėda.

1992

Return to the oldest international financial organisation

On 30 June 1992, the Bank of Lithuania’s membership in the Bank for International Settlements (BIS), located in Basel (Switzerland), was restored and the BIS shares that had belonged to the Bank of Lithuania since 1931 were returned. The Bank of Lithuania had lost contact with this institution upon liquidation by the Soviets.

1992

The BIS commenced operation in 1930 and is the world’s oldest international financial organisation. The BIS membership includes 56 central banks, the ECB, and the International Monetary Fund.

Photo by Marius Skuodis: Main headquarters of the BIS in Basel, where, as a shareholder, the Bank of Lithuania also has its office.

Return of pre-war gold

On 14 February 1992, the Bank of Lithuania reclaimed its gold holding from the central bank of France, on 31 March – the gold reserves that had been held at the Bank of England until World War II.

1992

Gold was also returned by the Bank for International Settlements, and compensation was received for the gold held with the central bank of Sweden. Now these reserves (nearly 5.8 tonnes) are stored at the Bank of England. In 2015, Jacques de Larosière, Head of the central bank of France in 1992, when it was the first country to return Lithuania’s pre-war gold holdings, was awarded the Cross of Commander of the Order for Merits to Lithuania.

Photo: Jacques de Larosière, Governor of Banque de France, showing a bar of Lithuanian gold to Vilius Baldišius, the then Chairman of the Board of the Bank of Lithuania, in 1992 in Paris.

First litas banknotes received

On 29 November 1991, the Bank of Lithuania received the first shipment of litas banknotes, printed in the USA by the private company United States Banknote Corporation.

1991

The shipment included 10, 20, 50, 100 denomination banknotes, which were used in circulation, whereas banknotes in the largest denominations – 500 and 1,000 litas – were never issued into circulation, since there was no economic need to use currency in such large denominations after the introduction of the litas. Later, as money security techniques improved, they were also no longer in line with the security requirements. The US-printed 500 and 1,000 litas banknotes were destroyed and only 20,000 samples of both denominations remained to be sold to collectors.

Litas Committee

On 5 November 1991, the Supreme Council of the Republic of Lithuania-Reconstituent Seimas passed the Republic of Lithuania Law on the Issue of Currency, stipulating that the litas and its 100th part – the centas – were now the currency of our country.

1991

The Law stipulated that the Litas Committee was to include the Chairman of the Supreme Council, Prime Minister, and Chair of the Board of the Bank of Lithuania. The Litas Committee was given the task of setting the date for the issue into circulation of the litas, the deadline for withdrawal from circulation of the rouble, and the rouble–litas exchange rate.

First litas coins received

On 31 October 1991, the Bank of Lithuania received the first shipment of litas circulation coins (10, 20, 50 centas and 1, 2, 5 litas), minted at the Birmingham Mint in the UK.

1991

Vladas Jurgutis scholarship

On 30 October 1990, the Board of the Bank of Lithuania, seeking to encourage the interest of students in Economics in issues related to money and banking, established a scholarship under the name of Prof Vladas Jurgutis, a famous Lithuanian economist, first Governor of the Bank of Lithuania, and long-time lecturer on finances and credit at Kaunas and Vilnius universities.

1990

Award for research on banking

In 1990, the Bank of Lithuania established an annual award for significant and relevant research work on banking. That same year, the award was given to Vladas Terleckas for his monograph Pinigai Lietuvoje 1915–1944 (Money in Lithuania 1915–1944).

1990

The author later prepared a series of books: Bankininkystė Lietuvoje 1795–1915, Lietuvos bankininkai. Gyvenimų ir darbų pėdsakai 1918–1940, Lietuvos bankininkystės istorija 1918–1941, Lietuvos bankas 1922–1943 metais: kūrimo ir veiklos studija, which were published by the Bank of Lithuania.

Launch of the Bank of Lithuania after the re-establishment of Independence

The Bank of Lithuania was established on 1 March 1990, after the Supreme Council of the Lithuanian SSR passed the Law on the Bank of Lithuania on 13 February of the same year.

1990

The present Bank of Lithuania continues the traditions of the central bank that had operated in the inter-war period. Despite harsh conditions, the Bank of Lithuania opened its doors right after the re-establishment of Independence. The Soviet Union declared an economic blockade against Lithuania and used various means of oppression, including disruption of payments. It was necessary to receive financing, form the Bank’s structure, bring together experts, find a building and communications equipment, and create the necessary legal environment for activities. 

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Last update: 18-04-2017