Suchergebnisse

2011 – 2014 was of great importance to the credit institutions working within Lithuania. This period included all kinds of major developments, from suspension of credit institutions, to insolvencies and bankruptcies all of which was put under the magnifying glass by the actively working journalists. These events were actively discussed in Lithuania by both the public and various political figures which gave rise to multiple opinions and never before seen discussions. However, most importantly these actions gave rise to questions related to the supervision and legal regulation of credit institutions based within Lithuania, which is carried out by the Bank of Lithuania. Generally clients who decide to lend their monetary assets to banks or credit unions should be aware that they assume part of the risks of a possible credit institution collapse. However, once the deposit and/or investment is made, a state owned company "Deposit and Investment Insurance" (VĮ "Indėlių ir investicijų draudimas") also becomes responsible for it, if it's equal or less than 100.000 EUR (one hundred thousand euros). Adequate supervision of credit institutions in Lithuania and as a matter of fact – any other country, should result in a much lower risk for the creditor who lent or placed monetary deposits within the credit institution. This supervision should provide adequate protection for the creditors from the risk of credit institution insolvency. Effective supervision of credit institutions should prohibit credit institutions from taking inadequate risks, to prohibit moving away from the classic banking principles and most importantly, this supervision should prohibit violation of laws. These circumstances helps to create a stable financial framework. Legal regulation is the basis of ensuring that financial institutions, which possess a license to engage in acceptance and issue of monetary deposits from non-professional market participants have to be financially secure and reliable. Constant supervision of how credit institutions act in accordance to the legal legislation acts, prompt response to the problems which surface within the scope of activities of the credit institution, protection of depositor and public interest, create assumptions for supervisory authorities to exercise effective supervision of credit institutions. This master's paper indicates the effective supervision of credit institutions regulatory legal concept. Effective supervision of credit institutions regulation and supervisory authority of both the Bank of Lithuania and the European Central Bank (from here onwards - ECB) is analyzed. It should be taken into account that the ECB provides direct supervision to the three primary Lithuanian credit institutions; the ones that fall outside its scope are supervised by the Bank of Lithuania. Aforementioned institutions cooperating together issue and/or cancel authorizations for credit institutions to operate (credit unions are excluded), in addition, they evaluate the 5 acquisition of qualified share packets. It must be noted that supervision of credit institutions performed by the Bank of Lithuania must be done in accordance to the instructions and requirements placed by the ECB. In order to find out whether credit institution supervision legal regulation is effective in Lithuania, this paper provides an analysis of relevant Lithuanian legislation and how this legislation embodies the principles and requirements of effective bank supervision as pointed out by Basel bank supervision committee as well as International Credit Union Regulator's Network and World Council of Credit Unions pointed out supervisory principles and requirements. In addition, this paper compares Lithuanian legislation related to credit institution regulation to legislation used by financially and economically developed states. Furthermore, this paper includes topic related observations provided by the experts of this field. An analysis provided by this master's paper points out an observation that certain shortcomings (limitations) originate from the regulation of supervisory authorities (institutions) responsibility and requirements for credit institution management and application of external audit. This paper points out a list of suggestions and recommendations on how to remove/avoid these shortcomings. It is established within Lithuanian legislation that damages caused by the illegal actions of the Bank of Lithuania or its employee's, which relate to the supervision of financial market, are rewarded if the injured party proves that the Bank of Lithuania or its employees were guilty of damages. Analysis provided in the paper shows that supervision of credit institutions are more efficient when losses/-damages caused by the supervisory authorities or its employees are rewarded only in cases when losses/-damages were caused with dishonest intentions (in bad faith). It should be noted that the findings of the bank audit will become more reliable and helpful to supervisory institutions for purposes of supervision, if Lithuanian legislation would set requirements pursuant to which the auditors responsible for bank audits would be required to possess specialized knowledge and competence. In addition, in order to make credit institution supervision more effective, it is necessary to establish clear-cut requirements for auditors who perform bank audits; these requirements should include a principle of professional skepticism which should be recognizable and visible in the documents provided by the auditor. Criminal liability should be established in Lithuanian legislation for bank executives who make hasty decisions which in turn lead to bank insolvency, bankruptcy – collapse. These legal acts should enable supervisory authorities to carry out effective supervision of credit institutions. Setting the appropriate supervisory requirements for the credit institutions determine the level of effectiveness of its supervision. Since the root of problems within credit unions is the passive participation of the union managing members, it is of utmost importance to establish clearly

2011 – 2014 was of great importance to the credit institutions working within Lithuania. This period included all kinds of major developments, from suspension of credit institutions, to insolvencies and bankruptcies all of which was put under the magnifying glass by the actively working journalists. These events were actively discussed in Lithuania by both the public and various political figures which gave rise to multiple opinions and never before seen discussions. However, most importantly these actions gave rise to questions related to the supervision and legal regulation of credit institutions based within Lithuania, which is carried out by the Bank of Lithuania. Generally clients who decide to lend their monetary assets to banks or credit unions should be aware that they assume part of the risks of a possible credit institution collapse. However, once the deposit and/or investment is made, a state owned company "Deposit and Investment Insurance" (VĮ "Indėlių ir investicijų draudimas") also becomes responsible for it, if it's equal or less than 100.000 EUR (one hundred thousand euros). Adequate supervision of credit institutions in Lithuania and as a matter of fact – any other country, should result in a much lower risk for the creditor who lent or placed monetary deposits within the credit institution. This supervision should provide adequate protection for the creditors from the risk of credit institution insolvency. Effective supervision of credit institutions should prohibit credit institutions from taking inadequate risks, to prohibit moving away from the classic banking principles and most importantly, this supervision should prohibit violation of laws. These circumstances helps to create a stable financial framework. Legal regulation is the basis of ensuring that financial institutions, which possess a license to engage in acceptance and issue of monetary deposits from non-professional market participants have to be financially secure and reliable. Constant supervision of how credit institutions act in accordance to the legal legislation acts, prompt response to the problems which surface within the scope of activities of the credit institution, protection of depositor and public interest, create assumptions for supervisory authorities to exercise effective supervision of credit institutions. This master's paper indicates the effective supervision of credit institutions regulatory legal concept. Effective supervision of credit institutions regulation and supervisory authority of both the Bank of Lithuania and the European Central Bank (from here onwards - ECB) is analyzed. It should be taken into account that the ECB provides direct supervision to the three primary Lithuanian credit institutions; the ones that fall outside its scope are supervised by the Bank of Lithuania. Aforementioned institutions cooperating together issue and/or cancel authorizations for credit institutions to operate (credit unions are excluded), in addition, they evaluate the 5 acquisition of qualified share packets. It must be noted that supervision of credit institutions performed by the Bank of Lithuania must be done in accordance to the instructions and requirements placed by the ECB. In order to find out whether credit institution supervision legal regulation is effective in Lithuania, this paper provides an analysis of relevant Lithuanian legislation and how this legislation embodies the principles and requirements of effective bank supervision as pointed out by Basel bank supervision committee as well as International Credit Union Regulator's Network and World Council of Credit Unions pointed out supervisory principles and requirements. In addition, this paper compares Lithuanian legislation related to credit institution regulation to legislation used by financially and economically developed states. Furthermore, this paper includes topic related observations provided by the experts of this field. An analysis provided by this master's paper points out an observation that certain shortcomings (limitations) originate from the regulation of supervisory authorities (institutions) responsibility and requirements for credit institution management and application of external audit. This paper points out a list of suggestions and recommendations on how to remove/avoid these shortcomings. It is established within Lithuanian legislation that damages caused by the illegal actions of the Bank of Lithuania or its employee's, which relate to the supervision of financial market, are rewarded if the injured party proves that the Bank of Lithuania or its employees were guilty of damages. Analysis provided in the paper shows that supervision of credit institutions are more efficient when losses/-damages caused by the supervisory authorities or its employees are rewarded only in cases when losses/-damages were caused with dishonest intentions (in bad faith). It should be noted that the findings of the bank audit will become more reliable and helpful to supervisory institutions for purposes of supervision, if Lithuanian legislation would set requirements pursuant to which the auditors responsible for bank audits would be required to possess specialized knowledge and competence. In addition, in order to make credit institution supervision more effective, it is necessary to establish clear-cut requirements for auditors who perform bank audits; these requirements should include a principle of professional skepticism which should be recognizable and visible in the documents provided by the auditor. Criminal liability should be established in Lithuanian legislation for bank executives who make hasty decisions which in turn lead to bank insolvency, bankruptcy – collapse. These legal acts should enable supervisory authorities to carry out effective supervision of credit institutions. Setting the appropriate supervisory requirements for the credit institutions determine the level of effectiveness of its supervision. Since the root of problems within credit unions is the passive participation of the union managing members, it is of utmost importance to establish clearly

2011 – 2014 was of great importance to the credit institutions working within Lithuania. This period included all kinds of major developments, from suspension of credit institutions, to insolvencies and bankruptcies all of which was put under the magnifying glass by the actively working journalists. These events were actively discussed in Lithuania by both the public and various political figures which gave rise to multiple opinions and never before seen discussions. However, most importantly these actions gave rise to questions related to the supervision and legal regulation of credit institutions based within Lithuania, which is carried out by the Bank of Lithuania. Generally clients who decide to lend their monetary assets to banks or credit unions should be aware that they assume part of the risks of a possible credit institution collapse. However, once the deposit and/or investment is made, a state owned company "Deposit and Investment Insurance" (VĮ "Indėlių ir investicijų draudimas") also becomes responsible for it, if it's equal or less than 100.000 EUR (one hundred thousand euros). Adequate supervision of credit institutions in Lithuania and as a matter of fact – any other country, should result in a much lower risk for the creditor who lent or placed monetary deposits within the credit institution. This supervision should provide adequate protection for the creditors from the risk of credit institution insolvency. Effective supervision of credit institutions should prohibit credit institutions from taking inadequate risks, to prohibit moving away from the classic banking principles and most importantly, this supervision should prohibit violation of laws. These circumstances helps to create a stable financial framework. Legal regulation is the basis of ensuring that financial institutions, which possess a license to engage in acceptance and issue of monetary deposits from non-professional market participants have to be financially secure and reliable. Constant supervision of how credit institutions act in accordance to the legal legislation acts, prompt response to the problems which surface within the scope of activities of the credit institution, protection of depositor and public interest, create assumptions for supervisory authorities to exercise effective supervision of credit institutions. This master's paper indicates the effective supervision of credit institutions regulatory legal concept. Effective supervision of credit institutions regulation and supervisory authority of both the Bank of Lithuania and the European Central Bank (from here onwards - ECB) is analyzed. It should be taken into account that the ECB provides direct supervision to the three primary Lithuanian credit institutions; the ones that fall outside its scope are supervised by the Bank of Lithuania. Aforementioned institutions cooperating together issue and/or cancel authorizations for credit institutions to operate (credit unions are excluded), in addition, they evaluate the 5 acquisition of qualified share packets. It must be noted that supervision of credit institutions performed by the Bank of Lithuania must be done in accordance to the instructions and requirements placed by the ECB. In order to find out whether credit institution supervision legal regulation is effective in Lithuania, this paper provides an analysis of relevant Lithuanian legislation and how this legislation embodies the principles and requirements of effective bank supervision as pointed out by Basel bank supervision committee as well as International Credit Union Regulator's Network and World Council of Credit Unions pointed out supervisory principles and requirements. In addition, this paper compares Lithuanian legislation related to credit institution regulation to legislation used by financially and economically developed states. Furthermore, this paper includes topic related observations provided by the experts of this field. An analysis provided by this master's paper points out an observation that certain shortcomings (limitations) originate from the regulation of supervisory authorities (institutions) responsibility and requirements for credit institution management and application of external audit. This paper points out a list of suggestions and recommendations on how to remove/avoid these shortcomings. It is established within Lithuanian legislation that damages caused by the illegal actions of the Bank of Lithuania or its employee's, which relate to the supervision of financial market, are rewarded if the injured party proves that the Bank of Lithuania or its employees were guilty of damages. Analysis provided in the paper shows that supervision of credit institutions are more efficient when losses/-damages caused by the supervisory authorities or its employees are rewarded only in cases when losses/-damages were caused with dishonest intentions (in bad faith). It should be noted that the findings of the bank audit will become more reliable and helpful to supervisory institutions for purposes of supervision, if Lithuanian legislation would set requirements pursuant to which the auditors responsible for bank audits would be required to possess specialized knowledge and competence. In addition, in order to make credit institution supervision more effective, it is necessary to establish clear-cut requirements for auditors who perform bank audits; these requirements should include a principle of professional skepticism which should be recognizable and visible in the documents provided by the auditor. Criminal liability should be established in Lithuanian legislation for bank executives who make hasty decisions which in turn lead to bank insolvency, bankruptcy – collapse. These legal acts should enable supervisory authorities to carry out effective supervision of credit institutions. Setting the appropriate supervisory requirements for the credit institutions determine the level of effectiveness of its supervision. Since the root of problems within credit unions is the passive participation of the union managing members, it is of utmost importance to establish clearly