Bank of Lithuania celebrates its 100th anniversary
The year 2022 marks the 100th anniversary of the establishment of the Bank of Lithuania, the central bank of the Republic of Lithuania. To commemorate this anniversary, the Bank of Lithuania organises guided tours, exhibitions, conferences, and various events, including the Open Doors. Collector coins will be issued to commemorate the centenary.
First graduates in Quantitative Economics
The bachelor’s programme in Quantitative Economics was created jointly by the Bank of Lithuania and Vilnius University in 2018. This is the first three-year English-taught study programme that offers a unique blend of economic, financial and data science disciplines.
The world’s first blockchain-based digital collector coin
On 23 July 2020, the Bank of Lithuania issued LBCOIN
On 23 July 2020, the Bank of Lithuania issued LBCOIN – the world’s first blockchain-based digital collector coin.
ECB Governing Council monetary policy meeting in Vilnius
On 5-6 June, the Governing Council of the European Central Bank held its external meeting in Vilnius.
This was the first time the Governing Council – which consists of the ECB Executive Board and the governors of the national central banks of the 19 euro area countries – took its monetary policy decisions in Lithuania.
Open Days at the Bank of Lithuania premises in Kaunas
On 27 October 2018, the Bank of Lithuania held an Open Day event in Kaunas. It was dedicated to the centenary of the restoration of Lithuania’s statehood.
Kaunas residents and city visitors had the chance to step back in time for a day and see how banks operated during the interwar period. The event attracted over 3,000 visitors.
Celebrating Lithuanian culture in Frankfurt am Main
As Lithuania celebrated the centenary of its restored independence, the European Cultural Days showcased Lithuania’s cultural gems.
On August-October 2018, three concerts of performers of classical music took place at Europe’s financial centre in Frankfurt am Main. The programme of the event was compiled by the Bank of Lithuania and the ECB.
Launch of CENTROlink
On 21 November 2017, the upgraded CENTROlink – a payment system managed and operated by the Bank of Lithuania – turned a new page in the Lithuanian history of payment services.
Joining the first wave of the pan-European adherence to the new scheme, the Bank of Lithuania has opened up the possibility for financial institutions to offer their clients the most cutting-edge innovation in the field of payments – instant payments, available 24/7/365, including weekends and holidays.
Ambitious four-year goals
On 10 January 2017, the Board of the Bank of Lithuania approved the strategic directions for the upcoming four years, setting specific goals and objectives. Having implemented them, the Bank of Lithuania is set to become one of the most effective central banks in the Nordic-Baltic region.
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.
On 1 January 2016, Lithuania joined the Single Euro Payments Area (SEPA), which encompasses 34 countries.
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.
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.
Adoption of the single European currency in Lithuania
On 1 January 2015, in place of its national currency – the litas – Lithuania adopted the euro, the single European currency.
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 22 October 2014, in preparation for the adoption of the single European currency, the first shipment of euro banknotes was flown to Vilnius Airport. Another one landed in Kaunas Airport on 29 October.
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 the ECB presented the Euro Star
On 25 September 2014, Mario Draghi, Governor of the ECB, visited the Bank of Lithuania.
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 IMF
On 18 July 2013, Christine Lagarde, Managing Director of the International Monetary Fund, visited Vilnius.
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.
On 23 May 2012, for the first and last time, a shipment of new litas banknotes, printed in Western Europe, reached Lithuania by air.
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.
New management model
On 2 January 2012, having implemented a new financial markets supervision model, the Bank of Lithuania established the Supervision Service to focus on the supervision of financial institutions (previously under three state institutions) as well as the settlement of disputes between consumers and financial institutions.
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.
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.
Vitas Vasiliauskas became Governor
On 24 March 2011, Vitas Vasiliauskas took over as Chairman of the Board of the Bank of Lithuania.
Global catalogue cover features the 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).
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.
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. This allowed the country’s financial institutions to make real-time settlements in euro.
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.
Member of the European System of Central Banks
Upon Lithuania’s accession to the European Union on 1 May 2014, the Bank of Lithuania became a member of the European System of Central Banks, which consists of the European Central Bank and the national central banks of all EU Member States.
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.
Vytis on Lithuanian euro coins
On 11 November 2004, the Board of the Bank of Lithuania decided how Lithuanian circulation coins featuring the Vytis – the coat of arm of the Republic of Lithuania – would be used once Lithuania adopted the single European currency.
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.
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.
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. The official exchange rate of the litas was LTL 3.4528 for EUR 1.
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 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.
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.
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.
Reinoldijus Šarkinas became Governor
On 15 February 1996, Reinoldijus Šarkinas took office as Chairman of the Board of the Bank of Lithuania.
The litas pegged to the US dollar
In 1994, under the Republic of Lithuania 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% backed with gold and convertible currency reserves.
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).
The outbreak of a systemic banking crisis in 1994 was a serious hit on the economic and financial system of the country.
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.
Kazys Ratkevičius became Governor
On 17 November 1993, Kazys Ratkevičius was appointed as Chairman of the Board of the Bank of Lithuania.
Romualdas Visokavičius became Governor
On 23 March 1993, Romualdas Visokavičius took office as Chairman of the Board of the Bank of Lithuania.
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.
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 them 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.
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.
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.
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 shipment of litas banknotes
On 29 November 1991, the Bank of Lithuania received the first shipment of litas banknotes, printed in the US by the private company United States Banknote Corporation.
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.
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 Lithuania.
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.
Vladas Jurgutis scholarship
On 30 October 1990, the Board of the Bank of Lithuania, seeking to stimulate the interest of students in Economics in issues related to money and banking, endowed 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.
Vilius Baldišis became Governor
On 31 July 1990, Vilius Baldišis was appointed as Chairman of the Board of the Bank of Lithuania.
Bronius Povilaitis became Governor
On 13 March 1990, Bronius Povilaitis was appointed as Chairman of the Board of the Bank of Lithuania.
Award for research on banking
In 1990, the Bank of Lithuania introduced the 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).
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.
Start of operations after the re-establishment of Independence
The Bank of Lithuania was established on 1 March 1990, after the Supreme Soviet of the Lithuanian SSR passed the Law on the Bank of Lithuania on 13 February of the same year. It started its operations shortly after Lithuania regained its independence on 11 March.
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.
Act of Nationalisation of the Bank of Lithuania
The Act of Nationalisation of the Bank of Lithuania was approved on 1 August 1940.
Start of coin mintage in Kaunas
A mint was established in Kaunas, and litas coins began to be minted in Lithuania.
Introduction of the gold standard
The gold standard, a widespread form of the monetary system, was introduced on 24 February 1931. The standard provided for the exchange of banknotes into gold coins, alloys, or foreign gold currencies.
Member of the BIS
The Bank of Lithuania became a member of the Bank for International Settlements (BIS).
Vladas Jurgutis, the first Governor
On 27 September 1922, the inaugural shareholders’ meeting of the Bank of Lithuania elected the first Board of the Bank. Professor Vladas Jurgutis was appointed Governor, and Adomas Prūsas − his Deputy. Three Board Members (Directors) were also elected — Julius Kaupas, Pijus Grajauskas, and Juozas Paknys.