Elīna Ribakova, Guest Researcher at the Peterson International Institute of Economics, is prepared to run as candidate to become the next President of the Bank of Latvia, as LETA was confirmed by Ribakova.
She admitted that he has had informal talks with multiple politicians on the possibility of becoming a candidate. She did not mention any names.
“Yes, I am prepared to run as candidate. It is a great honour for me to be considered for the position of President of the Bank if Latvia. I am prepared to use my international experience to contribute to the resilience of the Latvian economy to shocks and ensure growth,” said Ribakova.
She stressed that the President of the Bank of Latvia is the only post that could convince her to cease the work performed on sanctions in Washington
in cooperation with Peterson International Institute of Economics, Kyiv School of Economics and Bruegel think tank in Brussels.
“As a result of our research, sanctions have been imposed against the Russian “shadow fleet” and Russia has encountered difficulties in obtaining critical components for the production of weapons. This not only improves the position of Ukraine, but also strengthens the security of Latvia and the whole of Europe,” explained Ribakova.
When asked what, in her opinion, would be the main directions in which the work of the Bank of Latvia should be changed or strengthened, Ribakova emphasized that the Bank of Latvia has already done significant work. “My friends among the central bank governors comment that Martiņš Kazāks’ voice was respected at the European Central Bank (ECB) and he was one of the first to talk about inflation risks and urge active action,” stressed Ribakova.
First of all, in her opinion, it is necessary to find an opportunity to increase the availability of loans and lending in Latvia. Ribakova pointed out that currently, residents and companies conservatively store savings in banks with little return, but banks further issue them in very secure loans with high collateral requirements, and at relatively high rates.
Ribakova stressed that lending in Latvia is starting to increase slightly again, but more could be done by cooperating with financial market participants to find solutions together. “After the global financial crisis, there are still negative effects, but this crisis was 15 years ago, it is time to finally leave it in the past and start taking proportionate risks again. It’s safe in the comfort zone, but nothing grows there,” she said.
Secondly, Ribakova believes it is important to develop the capital market in order to ensure the growth of the Latvian economy by turning savings into investments more effectively. Currently, the Latvian capital market is dominated by bank loans, but they cannot cover all needs, and this is completely normal, she said. When problems arise with bank lending, the capital market can provide support by offering alternative sources of financing, such as bonds or stocks. In turn, if there are difficulties in the capital market, banks can help with the financing needed for the economy, the economist explained.
She pointed out that this interplay is essential to provide more funding opportunities. In a developed capital market, savings are effectively channelled into investments, entrepreneurs have access to various types of financing, but savers who are willing to take reasonable risks can earn much more in the long run than keeping money in the bank.
Finally, the Bank of Latvia must keep up with the times, emphasized Ribakova. She pointed out that in order to ensure resilience to shocks, it is necessary to understand not only monetary policy and financial stability, but also other risks, such as cyber-attacks and sabotage of infrastructure in the Baltic Sea during the current hybrid war.
Ribakova also stressed that the latest technologies should be actively used, both in the performance of basic tasks and in risk management.
She also mentioned that currently in her research she actively uses natural language processing in monetary policy analysis, as well as big data and artificial intelligence in sanctions research to explore how these new risks can affect both the financial sector and the economy.
“Representatives of the US and European countries, as well as central banks, are of great interest, and I often present the results of my research. I believe that the active use of big data and artificial intelligence can give Latvia a competitive advantage over other countries in Europe, as well as strengthen the role of the Bank of Latvia in the European system of central banks,” added Ribakova.
As it is known, it is necessary for the Latvian Saeima to elect a new President of the Bank of Latvia because the term of the current head of the central bank – Martiņš Kazāks – ended on the 21st of December 2024.