2007-02-01
The Board of the Bank of Lithuania was presented
1. The Board of the Bank of Lithuania was presented the report of the targeted inspection of AB PAREX bankas. The inspection focused on bank management and internal control and the credit risk management.
The bank was instructed to remove all deficiencies indicated in the inspection report by 1 July 2007.
2. Results of the inspection of AB Bankas Hansabankas
The Board of the Bank of Lithuania was presented the report of the inspection of AB Bankas Hansabankas. The inspection focused on credit and operational risk management and bank management and internal control in relation to these risks.
The bank was instructed to remove all deficiencies indicated in the inspection report by 1 June 2007.
3. Approval of the Description of the Coin Design Procedure
The Board of the Bank of Lithuania approved the Description of the Coin Design Procedure. It will replace the current Procedure for the Organisation of Litas and Cent Coin Design.
The new document includes and describes the early stages of coin design (idea generation and creation of sketches), which were not regulated up to now, defines the manner of creation of graphic designs and plaster models more comprehensively and the way of its evaluation and payment for it. The role of the Currency Design and Production Commission of the Bank of Lithuania in the creation of the coins issued by the Bank of Lithuania was also described.
It was established that the creation of coins is initiated by the Cash Department of the Bank of Lithuania through the said Commission.
4. Information on the operations of credit institutions and the activities of the Credit Institutions Supervision Department of the Bank of Lithuania in the fourth quarter of 2006
The Board was presented a review of the operations of domestic credit institutions and the activities of the Credit Institutions Supervision Department of the Bank of Lithuania in 2006.
The latest review of the operations of commercial banks, the Central Credit Union of Lithuania and credit unions is available on the website of the Bank of Lithuania under the chapter Credit Institutions.
5. Foreign Reserve Investment Report 2006
The Board of the Bank of Lithuania was presented the Foreign Reserve Investment Report 2006 prepared by the Market Operations Department of the Bank of Lithuania.
The Report reviews the trends of the change in foreign reserve amounts, the portfolio management results and their factors. The Board was informed about the exchange rate and credit risk levels, and presented the results of stress testing.
It was noted that the interest rates tended to increase in 2006. As the interest rates increased and the prices of debt securities declined, a significant share of income of the Bank of Lithuania was earned due to the fact that the bank reduced the maturity of its investments significantly in the beginning of the year.
Return on investment was higher last year than in 2005.
At the end of December 2006, official reserve assets made up LTL 15.2 billion.