Latvia

The quickening pace of Russia's rouble devaluation is piling pressure on the currencies of its neighbours and putting those without Moscow's sizeable reserves at risk of foreign debt default and further capital flight, Forbes reported. Investors are shying away from currencies such as Ukraine's hryvnia as the world economic slowdown crushes demand for its exports, global risk aversion shines a harsh light on Kiev's turbulent politics and Russia demonstrates its stranglehold on the country's energy supplies.

A Latvian government proposal to radically restructure the country's ailing economy is credible and ambitious, the Swedish government said Wednesday on behalf of a group of Nordic and Baltic countries, Agence France-Presse reported. "The fiscal restructuring programme is...one of the most credible restructuring programmes we've seen. It's very ambitious," Swedish Finance Minister Anders Borg told reporters in Stockholm, speaking for the eight-nation constituency.

Latvia's government has decided to take over the nation's No. 2 financial institution after the bank ran into a liquidity crisis, the Associated Press reported yesterday. The government decided late Saturday to take a 51 percent stake in Parex Bank, the Baltic state's second largest bank by total assets, based on data that indicated the bank was headed toward insolvency. The government bought the majority stake in Parex for 2 lats ($3.70). Another 34 percent stake in the bank will be held as collateral by the state-owned Hipoteku Bank.