News

2019.08.03 12:00

Prosecutors drop investigation over mortgage interest hike during financial crisis

Šarūnas Sabaitis, BNS2019.08.03 12:00

Lithuania's Prosecutor General's Office will not defend the public interest regarding alleged violations linked to the Vilibor (Vilnius Interbank Offered Rate) rate hike in 2008-2009. Then, people with mortgages incurred major financial losses due to the rising rates.

Prosecutors say no objective evidence has been identified during the investigation to prove that the authorities which supervised commercial banks violated any laws. Every borrowing case was individual, therefore, people can turn to court themselves, prosecutors said.

"All factual and legal circumstances presuppose the absence of a legal basis for a prosecutor to apply measures to defend the public interest over alleged violations related to the Vilibor rate in 2008-2009, which led to an increase in borrowing costs in litas for residents," the prosecution service's statement reads.

In April, the Prosecutor General's Office received a Cabinet request to assess the work of financial supervision institutions during the 2009-2010 crisis. Prosecutors say they investigation involved only the legal, not economic, assessment.

The government's decision to turn to the Prosecutor General's Office over the authorities' performance came after Stasys Jakeliūnas, former chairman of the Seimas Committee on Budget and Finance (CBF), informed the Cabinet about its parliamentary investigation into the circumstances that led to the 2009-2010 economic crisis.

Prime Minister Saulius Skvernelis said then prosecutors would be asked to evaluate whether financial watchdogs properly performed their functions in 2008-2009.

Law enforcement was also asked to evaluate the possible need to defend the public interest as many people with mortgages incurred major losses due the rising Vilibor rate.