Latvia central bank chief held by anti-corruption agency, urged to step aside

By Gederts Gelzis

RIGA (Reuters) - Latvia's anti-corruption agency has detained central bank Governor Ilmars Rimsevics, prompting calls for him to step aside while he is under investigation.

Prime Minister Maris Kucinskis sought to reassure the nation that the economy and the financial system were stable.

But in a statement sent to Reuters he did not say why Rimsevics, a member of the European Central Bank's interest rate-setting Governing Council, had been detained or give details of the investigation.

"There are no indications that would suggest threats to the financial system of Latvia," the prime minister said.

Finance Minister Dana Reizniece-Ozola said Rimsevics should step aside for the time being to protect the Baltic country's reputation.

"Given that the governor of the central bank is a symbol for every country, [then] I think that it would be sensible at this moment that Mr. Rimsevics, at least during the investigation, steps down," Reizniece-Ozola told a news conference.

"Under the current circumstances... every day that Mr. Rimsevics remains in the post of governor of the central bank, the situation (for the reputation of Latvia's financial system) substantially worsens," she said.

Rimsevics' lawyer, Saulvedis Varpins, told Latvian state television that the governor had been detained at 6.15 p.m. (1615 GMT) on Saturday after he arrived for questioning at the offices of the anti-corruption agency.

He said he had no information about whether Rimsevics would be released from custody and declined to comment on what he was being investigated for.

Varpins said the detention was unlawful. "A complaint is being prepared at the moment," he told news agency LETA without elaborating.

The anti-corruption watchdog declined to comment on Sunday but said it would hold a press conference at 1100 GMT on Monday.

The economy in the Baltic state, which gained independence from the Soviet Union in 1991 and shares a border with Russia, has been booming in recent years.

The economy grew by 4.5 percent in 2017, the fastest pace since 2011, and growth is expected to be around 4 percent this year, according to estimates from the finance ministry.

The Latvian central bank is an independent institution and Rimsevics has been its head since 2001. He has been a member of the ECB's Governing Council since January 2014, when Latvia adopted the euro.

A spokesperson for the European Central Bank declined to comment on Rimsevics' detention.

Latvia's Economics Minister Arvils Aseradens, speaking on Radio Latvia, also said the governor should consider resigning.

The home and office of the central bank's governor were searched on Friday, the state broadcaster said on Saturday.

It is a another setback for Latvia's banking sector, which has also been hit by allegations by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) that its third largest financial institution by assets, ABLV Bank, has institutionalised money laundering.

FinCen said last week that it was seeking to impose sanctions on ABLV. ABLV said in a statement in response on Tuesday that FinCen had referred to unfounded and misleading information about the bank.

(Reporting by Gederts Gelzis, writing by Johan Ahlander; Editing by Susan Fenton and Adrian Croft)