This study of Latvia’s mortgage lending market identifies key challenges and outlines the necessary steps to improve the effectiveness of competition in the interests of consumers. Compared to other countries, from a structural perspective, Latvia’s mortgage market is relatively less developed.

Key recommendations include fostering an environment that encourages new types of lenders and intermediaries to enter the market, expanding funding sources (particularly covered bonds), and providing borrowers with better tools and platforms to compare and assess the offers available on the market. The study also examines how responsibilities for promoting competition are currently divided among policymakers, regulators, the Competition Council, and politicians, noting an overall lack of clarity and agreement.

The study is aiming to foster an evidence-based discussion about the development of Latvia’s mortgage market over the next 5-10 years. The study authors are BFC economists and experts Kristīne Dambe, Andrejs Jakobsons, and William Schaub.

Date: November 8, 2024
Venue: EU House

The event started with the opening remarks by  Zane Petre, Head of the European Commission Representation in Latvia and Elīna Gaile-Sarkane, RTU Vice-Rector for Studies.

The research conclusions were presented by Kristīne Dambe, the Founding Director of the Baltic Finance Center (presentation PDF).

The presentation was followed by the panel discussion: What Should the Mortgage Market Look Like in 2030 and How to Get There? moderated by Ainārs Ozols, Chairman of the BFC Development Council.

Panelists:

Arvils Ašeradens, Minister of Finance
Mārtiņš Kazāks, President of the Bank of Latvia
Skaidrīte Ābrama, Chair of the Saeima Economic Committee
Uldis Cērps, Head of the Finance Latvia Association
Ainārs Balcers, Co-Chair of the Finance Latvia Association’s Lending Committee, Head of Swedbank Latvia’s Private Individuals Division
Tīna Lūse, Head of the FinTech Latvia Association
Kristīne Dambe, BFC Founding Director

Key questions of the discussion:

• What kind of mortgage market do we want to develop over the next 5-10 years, and what are we currently lacking for an effective competitive process?
• Will the solutions implemented so far to improve competition be sufficient, considering the experience of other countries?
• Who is responsible for promoting competition in the financial sector, and how can the approach to promoting competition be strengthened based on global best practices?

The event was closed with the summary by Mārtiņš Zemītis, Head of the European Parliament Office in Latvia.

The study is developed within the framework of EC Recovery and Resilience Mechanism Project No. 5.2.1.1.i.0/1/23/I/CFLA/001 “Strengthening Knowledge and Research Capacity in the Areas of Anti-Money Laundering, Financial Technologies, and Sector Analysis”.