EUROPE: Latvia is currently a nation of borrowers not savers.
In an interview with Republika.lv magazine Uldis Cerps, head of the Latvian Finance and Market Commission (FKTK), said that Latvia's financial market is primarily based on the banking sector which accounts for more than 96% of the whole financial sector; the insurance market constitutes about 3% while the share of other segments does not exceed 1%.
He states that this state of affairs indicates the low level of domestic savings which is typical of a transitional economy. The Latvian market is dominated by a borrowing rather than an accruing culture fostered by high global liquidity resulting in low interest rates.
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