Commercial banks are not the only ones that will be able to receive loans from the Bank of Lithuania
A draft law on the amendment of Article 8, part 5 of the Republic of Lithuania Law on the Bank of Lithuania has been passed in The Seimas of the Republic of Lithuania. Now the Bank of Lithuania will be able to provide loans not only to credit institutions (i.e. banks) but also to other financial market participants, such as electronic money and payment institutions, insurance, financial leasing and other institutions providing financial services. In order to receive such a loan, the financial institution will have to provide sufficient collateral to the Bank of Lithuania.
TRINITI views very positively this new amendment of the Law on the Bank of Lithuania. It will expand the possibilities of the Bank of Lithuania to regulate the volume of cash flow in the market and will contribute to ensuring financial liquidity of financial institutions and their ability to provide credit to other market participants during the time of economic shock caused by COVID-19.
TRINITI welcomes these steps taken by the Bank of Lithuania as they indicate that the Bank of Lithuania is following the example of the largest and most advanced central banks in the world, such as Federal Reserve, Bank of England and others, and preparing for a possibility to employ unconventional monetary policy measures in the future, which is particularly relevant in the situation where the European and world finance finds itself today.