“We have updated the supervisory policy taking into account Lietuvos bankas’ mission to foster a reliable financial system, the latest trends and current events in the financial market as well as our and other countries’ best practices. We strive for constructive cooperation with financial market participants under supervision, which would benefit consumers and ensure the safety of their funds and a high level of trust,” says Simonas Krėpšta, Member of the Board of Lietuvos bankas.
In order to help financial market participants grow sustainably and comply with legal requirements, Lietuvos bankas pays and will continue to pay special attention to the explanation of requirements, inform about supervisory priorities and scheduled inspections, articulate its expectations, share good and bad practices, and consult on legislative initiatives. Lietuvos bankas seeks to maintain a continuous open dialogue with financial market participants and their associations, offers advice and organises trainings. This year, these have attracted a record number of participants (over 4,200), which is twice as many as in 2023.
Lietuvos bankas emphasises the importance of a consumer-oriented culture and seeks that financial market participants treat consumers fairly when concluding and executing financial service contracts. As a supervisory authority, the central bank pays great attention to ensuring that financial market participants take due account of consumer interests and properly inform them when developing, distributing or reviewing financial products.
Lietuvos bankas performs risk-based financial market supervision. This means that the focus and resources are mainly channelled to the areas that pose the biggest risk, and this principle is to apply to all financial market supervision activities. Given the global importance of the prevention of money laundering and terrorist financing, supervision in this field has been identified as a distinct area in addition to prudential and financial services supervision.
The updated supervisory policy also addresses the imposition of enforcement measures depending on the nature of a violation and other circumstances. For example, the framework for settlement (administrative) agreements came into force in November this year. In some cases, it allows a financial market participant to seek a compromise with the supervisory authority on an enforcement measure. However, in exceptional cases where particularly gross violations are identified and where they would jeopardise the stability of the financial system or the public interest, Lietuvos bankas would urgently take all necessary measures to prevent the threat.
The document also stresses the importance of licensing as the first stage of supervision. Lietuvos bankas seeks to ensure that the domestic financial market is accessed by reliable, transparent, financially capable and prepared market participants who are well versed in the risks of the business they intend to undertake and whose managers are competent and of good repute.
Lietuvos bankas supports the development of innovations and believes that regulation and supervision should be technologically neutral. This means that financial innovations must comply with the existing requirements of financial and capital markets legislation, regardless of the technology used for the service or product. In its activities, Lietuvos bankas will also seek to implement advanced digital solutions that would increase operational efficiency and reduce the administrative burden for market participants.
