On the 9th of July the Banking Service started its operation at the Bank of Lithuania. It has been authorised the execution of all banking operations– management of foreign reserves and other financial assets, investment of funds of the Bank of Lithuania depositors, payments and settlements of depositors, credit institutions and of the Bank of Lithuania.
The Service envisaged to be employed by 52 employees, has been established after the restructuring of the Market Operations Department, Payment Systems Department and the Depositors Service Division of the Accounting Department of the Bank of Lithuania. The Banking Service is composed of two units: the Investment Management Department and Payment Services Department.
The new Service will have more functions and they will be more complicated compared to those performed by former structural units. When managing foreign reserve assets focus will be given to modern and more complex investment strategies, a wider diversification of investments.
“A protracted euro area debt crisis has changed financial markets dramatically. This inevitably forces to change the management of foreign reserve assets of the Bank of Lithuania. In terms of credit risk, the range of particularly safe investments is becoming narrower, while an immensely low or even negative yield on these investments and an aspiration to maintain an appropriate level of the investment diversification results in a need to develop investment tools and geography, to be oriented into a possibly more fluctuating return, however more profitable investments in the long-term,” said Darius Petrauskas, Deputy Chairman of the Chairman of the Bank of Lithuania Board.
According to him, higher efficiency standards will be attained in the payment services as well.
Mindaugas Vaičiulis, 37- year old former Director of Treasury Department of DnB NORD Bank and Managing Director the DnB NORD Investicijų Valdymas, former Director of Investment Strategy Modelling in UAB “Finasta Asset Manegement”and of Asset Management Department at the branch of MP Bank for the Baltic States has been appointed Director of the Banking Service. Mindaugas Vaičiulis, having 17- year experience in the management of finances and investments, is also President of the Association of Financial Analysts.
“Among the main tasks raised for the Banking Service of the Bank of Lithuania is a more effective application of available investment tools and introduction of new ones, including derivatives. Having expanded their arsenal, apart from forming better conditions for an optimal usage of financial resource in order to get return on investments, we shall have more ample possibilities for the management of risk, as well” Mindaugas Vaičiulis said.
The Banking Service has been established as part of the structural reform of the Bank of Lithuania, which aims at making the institution’s activity more efficient by concentrating key functions in specialised services. The Supervision Service has already been operating from the beginning of the year, in May the Economics and Financial Stability Service commenced its activities. From September the Cash Management Service should start its functions.