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2020.04.17 17:09

Coronavirus crisis a chance to discuss state bank idea, says Lithuanian president

Paulius Viluckas, BNS2020.04.17 17:09

The coronavirus crisis is a chance to discuss the establishment of a state bank, Lithuanian President Gitanas Nausėda told reports on Friday. Nausėda has previously said the idea shouldn't be "a taboo".

"There are very favorable conditions right now to speak about a state bank," he told journalists on Friday, adding that the institution could also be called a development fund.

Read more: Most Lithuanians would like a commercial state bank – survey

"Whether we call it a bank or a development fund, the key thing is whether this fund, or bank, will contribute to Lithuania's economic competitiveness and build necessary bridges into the future," Nausėda said.

The president also said he had discussed the idea with Prime Minister Saulius Skvernelis: "Quite a lot of input has already been done," he said.

The president first raised the idea of a state bank last year, saying it "should not be a taboo".

A state-capital bank would counter the reducing competition in the country's financial sector, he said at the time.

Three active market players in Lithuania have either left or merged in recent years, and now SEB and Swedbank have a market share of over 60 percent in terms of assets.

The bank could also "fund projects that have a positive impact on climate change, and also strategic state infrastructure projects," according to Nausėda.

Finance Minister Vilius Šapoka, however, said at the time that it would be expensive and risky, and Vitas Vasiliauskas, chairman of the board at the Bank of Lithuania, also expressed his doubts on the idea.

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