Assessing business practices in Latvia’s financial sector.

The financial sector received specific attention when assessing Latvia's readiness to join the euro area, as well as in the context of the post-programme surveillance. The main concern is that some particular features of the Latvian financial sector could lead to negative spill-overs to the euro area, either because the sector might prove to be unstable and require external help or because of ambiguous business practices in this sector. The areas giving rise to concern include growing non-resident banking, implementation of anti-money laundering measures and recent changes in the corporate tax code.