BANK DEPOSITS IN LATVIA: RECENT TRENDS AND DEVELOPMENT
##plugins.themes.bootstrap3.article.main##
##plugins.themes.bootstrap3.article.sidebar##
Published:
Nov 21, 2025
Abstract
Bank deposits occupy an important place in the sources of the formation of banking resources, and in many European banks reach 70%. However, recently, due to unstable economic policies, the amount and share of total deposits in the banking system has been declining, which leads to a shortage of long-term banking resources. In this article, the author examines the trends in the development of bank deposits in Latvia, identify patterns in the process of their formation in conjunction with active operations that generate income. The problem of turning deposits into bank assets in terms of the timing, scale, expediency and efficiency of the use of attracted funds was highlighted. The purpose of the study is to analyse and assess the trends in deposit operations in Latvia, as well as their forecasting until 2030. Author used such methods as economic analysis, comparison method, economic grouping, statistical methods, extrapolation method and others. The results of the study can be used by both commercial banks and their customers.
How to Cite
Konovalova, N. (2025). BANK DEPOSITS IN LATVIA: RECENT TRENDS AND DEVELOPMENT. Baltic Journal of Legal and Social Sciences, 7-14. https://doi.org/10.30525/2592-8813-2025-spec-1
##plugins.themes.bootstrap3.article.details##
Keywords
Bank Deposits, Liabilities, Bank Resources Transformation, Forecast Trends
References
1. Choi, M., Rocheteau, G.: A model of retail banking and the deposit channel of monetary policy. Journal of Monetary Economics, Vol. 139, pp. 127-147 (2023). https://doi.org/10.1016/j.jmoneco.2023.06.010
2. Andolfano, D., Berentsen, A., Martin F.: Money, Banking and Financial Market. Rev. Econ. Stud., Vol. 87, pp. 2049-2086 (2020). https://doi.org/10.1093/restud/rdz051
3. Bethune, Z., Rochetau, G., Wong, T.-N., Zhang, C.: Lending relationship and optimal monetary policy. The Review of Economic Studies, Vol. 89 (4), pp. 1833-1872 (2021). DOI: 10.1093/restud/rdab077
4. Chen, Q., Goldstein, I., Huang, Z., Vashishtha, R.: Bank transparency and deposit flows. Journal of Financial Economics, Vol. 146, Issue 2, pp. 475-501 (2022). DOI: 10.1016/j.jfineco.2022.07.009
5. Begenau, J., Stafford, E.: Uniform rate setting and the deposit channel. Available at SSRN 41368582022. (2023). http://dx.doi.org/10.2139/ssrn.4136858
6. Alikaeva, M., Oborin, M.: Credit Policy as a Tool of the Commercial Bank., Vol.5, Issue 3, pp.832 – 845 (2020)
7. Saksonova, S.: The analysis of company’s capital and evaluation of factors which influence creation of the optimal capital structure, Vol.7, Issue 3, pp.147-153 (2006). DOI 10.1080/16111699.2006.9636135
8. Ilyunina, D., Lunyakov, O.: The essence and role of deposit resources in commercial banks. Journal of Finance and Credit, Vol. 23 (32), pp. 1894-1910 (2017). DOI:10.24891/fc.23.32.1894
9. Gurov, I.N., Kartaev, F.S., Vinogradova, A.S., Predicting the outflow of household deposits based on the intensity of search queries. Finance Theory and Practice. Vol. 27(3), pp. 92-104 (2023). DOI:10.26794/2587-5671-2023-27-3-92-104
10. Mikhaylova A.A., Mikhaylov A.S., Savchina O.V., Plotnikova A.P.: Innovation landscape of the Baltic region. Administratie si Management Public, (33), pp. 165-180, (2019) DOI: 10.24818/amp/2019.33-10
11. Katalkina, O., Saksonova, S.: Crowdfunding Cross-Border Business Financing Practice: The Evidence from the Baltic States. Lecture Notes in Networks and Systems, Vol. 410, Pages 472 – 481, (2022), DOI 10.1007/978-3-030-96196-1_43
12. Kolesnik, N.F., Manyaeva, V.A., Rykov S.V.: Methods of Analysis of Commercial Banks’ Deposit Portfolio. Conference paper “Global Challenges and Prospects of The Modern Economic Development”, 2021, DOI:10.15405/epsbs.2021.04.02.45
13. Ni, T., Ren, Y., Choi, J.: Deposit insurance system and commercial bank profitability: A quasi-natural experiment based on the deposit insurance regulations. Finance Research Letters, Vol. 67, Part A (2024). https://doi.org/10.1016/j.frl.2024.105763
14. Chen, Q., Shen, C.: Deposit insurance system, risk-adjusted premium and bank systemic risk: Evidence from China. Research in International Business and Finance, Vol. 65 (2023). https://doi.org/10.1016/j.ribaf.2023.101969
15. 1Ashraf, B.N., Zheng, C., Jiang, C., Qian, N.: Capital regulation, deposit insurance and bank risk: International evidence from normal and crisis periods. Research in International Business and Finance, Vol. 52 (2020). https://doi.org/10.1016/j.ribaf.2020.101188
16. Saeidian, M., Chashmi, S., Valiollahpur, M.: A study on relationship between attracting deposits and granting facilities on growth of banks’ deposits. Management Science Letters. Vol. 4 (6), pp.1335-1340 (2014). DOI:10.5267/j.msl.2014.4.008
17. Bindseil, U., Senner, R.: Destabilisation of Bank Deposits Across Destinations – Assessment and Policy Implications. SSRN, pp. 1-41 (2023). http://dx.doi.org/10.2139/ssrn.4534754
18. Mathur, H.: Analysis of Growth Rate of Deposits and Advance: A Study of Selected Banks in India. SSRN, pp.1-10 (2017). http://dx.doi.org/10.2139/ssrn.3045119
19. Dia, E., VanHoose, D.: Real resource utilization in banking, economies of scope, and the relationship between retail loans and deposits. Economics Letters. Vol 177, pp.39-42 (2019). https://doi.org/10.1016/j.econlet.2019.01.018
20. Fleckenstein, M., Longstaff F.A.: Is Maturity-Transformation Risk Priced into Bank Deposit Rates? National Bureau of Economic Research. Working Paper 32724, pp. 1-44, (2024). DOI 10.3386/w32724
21. Recent developments in bank deposits. The FRED Blog. Economic data. Homepage, https://fredblog.stlouisfed.org/2024/03/recent-developments-in-bank-deposits/, last accessed 2024/07/25
22. Bank of Latvia, Homepage, https://www.bank.lv/en/, last accessed 2024/07/25
23. Finance Latvia Association, Homepage https://www.financelatvia.eu/en/industry-data/, last accessed 2024/07/25
24. Basel Committee on Banking Supervision, Homepage, http://www.bis.org/, last accessed 2024/07/25
25. Helgi Library, Banking, Statistical data, Available at http://www.helgilibrary.com/pages/data/, last accessed 2024/07/30
2. Andolfano, D., Berentsen, A., Martin F.: Money, Banking and Financial Market. Rev. Econ. Stud., Vol. 87, pp. 2049-2086 (2020). https://doi.org/10.1093/restud/rdz051
3. Bethune, Z., Rochetau, G., Wong, T.-N., Zhang, C.: Lending relationship and optimal monetary policy. The Review of Economic Studies, Vol. 89 (4), pp. 1833-1872 (2021). DOI: 10.1093/restud/rdab077
4. Chen, Q., Goldstein, I., Huang, Z., Vashishtha, R.: Bank transparency and deposit flows. Journal of Financial Economics, Vol. 146, Issue 2, pp. 475-501 (2022). DOI: 10.1016/j.jfineco.2022.07.009
5. Begenau, J., Stafford, E.: Uniform rate setting and the deposit channel. Available at SSRN 41368582022. (2023). http://dx.doi.org/10.2139/ssrn.4136858
6. Alikaeva, M., Oborin, M.: Credit Policy as a Tool of the Commercial Bank., Vol.5, Issue 3, pp.832 – 845 (2020)
7. Saksonova, S.: The analysis of company’s capital and evaluation of factors which influence creation of the optimal capital structure, Vol.7, Issue 3, pp.147-153 (2006). DOI 10.1080/16111699.2006.9636135
8. Ilyunina, D., Lunyakov, O.: The essence and role of deposit resources in commercial banks. Journal of Finance and Credit, Vol. 23 (32), pp. 1894-1910 (2017). DOI:10.24891/fc.23.32.1894
9. Gurov, I.N., Kartaev, F.S., Vinogradova, A.S., Predicting the outflow of household deposits based on the intensity of search queries. Finance Theory and Practice. Vol. 27(3), pp. 92-104 (2023). DOI:10.26794/2587-5671-2023-27-3-92-104
10. Mikhaylova A.A., Mikhaylov A.S., Savchina O.V., Plotnikova A.P.: Innovation landscape of the Baltic region. Administratie si Management Public, (33), pp. 165-180, (2019) DOI: 10.24818/amp/2019.33-10
11. Katalkina, O., Saksonova, S.: Crowdfunding Cross-Border Business Financing Practice: The Evidence from the Baltic States. Lecture Notes in Networks and Systems, Vol. 410, Pages 472 – 481, (2022), DOI 10.1007/978-3-030-96196-1_43
12. Kolesnik, N.F., Manyaeva, V.A., Rykov S.V.: Methods of Analysis of Commercial Banks’ Deposit Portfolio. Conference paper “Global Challenges and Prospects of The Modern Economic Development”, 2021, DOI:10.15405/epsbs.2021.04.02.45
13. Ni, T., Ren, Y., Choi, J.: Deposit insurance system and commercial bank profitability: A quasi-natural experiment based on the deposit insurance regulations. Finance Research Letters, Vol. 67, Part A (2024). https://doi.org/10.1016/j.frl.2024.105763
14. Chen, Q., Shen, C.: Deposit insurance system, risk-adjusted premium and bank systemic risk: Evidence from China. Research in International Business and Finance, Vol. 65 (2023). https://doi.org/10.1016/j.ribaf.2023.101969
15. 1Ashraf, B.N., Zheng, C., Jiang, C., Qian, N.: Capital regulation, deposit insurance and bank risk: International evidence from normal and crisis periods. Research in International Business and Finance, Vol. 52 (2020). https://doi.org/10.1016/j.ribaf.2020.101188
16. Saeidian, M., Chashmi, S., Valiollahpur, M.: A study on relationship between attracting deposits and granting facilities on growth of banks’ deposits. Management Science Letters. Vol. 4 (6), pp.1335-1340 (2014). DOI:10.5267/j.msl.2014.4.008
17. Bindseil, U., Senner, R.: Destabilisation of Bank Deposits Across Destinations – Assessment and Policy Implications. SSRN, pp. 1-41 (2023). http://dx.doi.org/10.2139/ssrn.4534754
18. Mathur, H.: Analysis of Growth Rate of Deposits and Advance: A Study of Selected Banks in India. SSRN, pp.1-10 (2017). http://dx.doi.org/10.2139/ssrn.3045119
19. Dia, E., VanHoose, D.: Real resource utilization in banking, economies of scope, and the relationship between retail loans and deposits. Economics Letters. Vol 177, pp.39-42 (2019). https://doi.org/10.1016/j.econlet.2019.01.018
20. Fleckenstein, M., Longstaff F.A.: Is Maturity-Transformation Risk Priced into Bank Deposit Rates? National Bureau of Economic Research. Working Paper 32724, pp. 1-44, (2024). DOI 10.3386/w32724
21. Recent developments in bank deposits. The FRED Blog. Economic data. Homepage, https://fredblog.stlouisfed.org/2024/03/recent-developments-in-bank-deposits/, last accessed 2024/07/25
22. Bank of Latvia, Homepage, https://www.bank.lv/en/, last accessed 2024/07/25
23. Finance Latvia Association, Homepage https://www.financelatvia.eu/en/industry-data/, last accessed 2024/07/25
24. Basel Committee on Banking Supervision, Homepage, http://www.bis.org/, last accessed 2024/07/25
25. Helgi Library, Banking, Statistical data, Available at http://www.helgilibrary.com/pages/data/, last accessed 2024/07/30