Stability of the Banking Sector and Competitiveness: a Latvian Perspective
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Competitiveness of any country is closely related to the stability of the banking sector. Therefore, the objective of the paper is to analyse the main factors that influence the stability of the Latvian banking system and consequently the competitiveness of the country. Analysis is made based on the multiple choice model. The analysis shows that one of the most important factors, negatively influencing stability of the banking system, is loan quality, that is closely related to the ease of access to loans. The paper identifies the main imbalances in banking operations that have lead to these problems and offers proposals to their solution.
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