Parex splits up to safeguard its future

Latvia’s Parex banka is the one of the biggest victims of the financial crisis in central and eastern Europe. As its chairman tells Sudip Roy, it is pinning its recovery hopes on a good bank/bad bank strategy.

WHEN HISTORIANS DRAW up a list of the big casualties of this crisis it is unlikely that Parex banka will feature prominently.

The Latvian bank’s troubles were nowhere near as central to the health of the global financial system as Lehman Brothers’ bankruptcy, Bear Stearns’ collapse or AIG’s bailout. In central and eastern Europe, however, Parex is notorious as the region’s biggest victim to date after it had to be rescued by the government in November 2008 following a substantial withdrawal of deposits.

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