Financial sector
Financial corporation sector (sector S.12 according to ESA 2010) has the following breakdown:
Classification of financial corporation sector (S.12) in Latvia
| Monetary financial institutions (MFIs) | Latvijas Banka (S.121) | ||
| Deposit-taking corporations except the central bank (S.122) |
Credit institutions | capital companies which receive deposits and other repayable funds from an unrestricted range of customers, grant loans and provide other financial services on their own behalf. | |
| Credit unions | cooperative associations with a variable number of members and capital; pursuant to the Law on Credit Unions and their articles of association, they shall provide members of the unions the following financial services: 1) receive deposits of members and other repayable funds; 2) provide loans to members, also in accordance with the financial leasing regulations; 3) make cash and non-cash payments for servicing members, also by use of payment instruments other than cash; 4) trade in financial instruments and currency on the members’ instruction, as well as provide other services stipulated by law. |
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| Electronic money institutions | 1) commercial companies having been granted a licence to issue electronic money; 2) legal persons that do not require a licence to issue electronic money pursuant to the provisions of Article 51 of the Law on Payment Services and Electronic Money. |
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| Money market funds (S 123) - consists of all financial corporations and quasi-corporations, except those classified in the central bank and in the credit institutions subsectors, which are principally engaged in financial intermediation. Their business is to issue investment fund shares or units as close substitutes for deposits from institutional units, and, for their own account, to make investments primarily in money market fund shares/units, short-term debt securities, and/or deposits. The following financial intermediaries are classified in subsector S.123: investment funds including investment trusts, unit trusts and other collective investment schemes whose shares or units are close substitutes for deposits. | |||
| Non-MMF investment funds (S.124) | consists of all collective investment schemes, except those classified in the MMF subsector, which are principally engaged in financial intermediation. Their business is to issue investment fund shares or units which are not close substitutes for deposits, and, on their own account, to make investments primarily in financial assets other than short-term financial assets and in non-financial assets (usually real estate). Non-MMF investment funds cover investment trusts, unit trusts and other collective investment schemes whose investment fund shares or units are not seen as close substitutes for deposits. The following financial intermediaries are classified in subsector S.124: (a) open-ended investment funds whose investment fund shares or units are, at the request of the holders, repurchased or redeemed directly or indirectly out of the undertaking's assets; (b) closed-ended investment funds with a fixed share capital, where investors entering or leaving the fund must buy or sell existing shares; (c) real estate investment funds; (d) investment funds investing in other funds ('funds of funds'); (e) hedge funds covering a range of collective investment schemes, involving high minimum investments, light regulation, and a range of investment strategies. |
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| Other financial intermediaries, except insurance corporations and pension funds (S.125) | the other financial intermediaries, except insurance corporations and pension funds, subsector (S.125) consists of all financial corporations and quasi-corporations which are principally engaged in financial intermediation by incurring liabilities in forms other than currency, deposits, or investment fund shares, or in relation to insurance, pension and standardised guarantee schemes from institutional units. | ||
| Financial auxiliaries (S.126) | the financial auxiliaries subsector (S.126) consists of all financial corporations and quasi-corporations which are principally engaged in activities closely related to financial intermediation but which are not financial intermediaries themselves. The following financial corporations and quasi-corporations are classified in subsector S.126: (a) insurance brokers, salvage and average administrators, insurance and pension consultants, etc.; (b) loan brokers, securities brokers, investment advisers, etc. |
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| Captive financial institutions and money lenders (S.127) | consists of all financial corporations and quasi-corporations which are neither engaged in financial intermediation nor in providing financial auxiliary services, and where most of either their assets or their liabilities are not transacted on open markets. | ||
| Insurance corporations (S 128) | Financial institutions that are engaged in financial intermediation as a consequence of the pooling of risks mainly in the form of direct insurance or reinsurance. Insurance corporations provide life or non-life insurance services. This sector comprises insurers, re-insurers and state guarantee funds. | ||
| Pension funds (S 129) | Financial institutions that insure social risk of their members by accruing and investing voluntary contributions made by members themselves or for their benefit to provide such members with extra old age or disability pension capital. This sector comprises private pension funds and state-funded pension scheme assets. | ||
Other sectors of the economy
ESA 2010 also provides for the classification of the economic agents as non-financial corporations, general government, households and non-profit institutions serving households (see Table "Classification of other sectors in Latvia").
Classification of other sectors in Latvia
| Non-financial corporations (S.11) | Non-financial corporation – an economic entity producing goods or providing non-financial services with the aim of gaining profit or other proceeds. In the Republic of Latvia, an individual merchant registered with the Commercial Register of the Enterprise Register of the Republic of Latvia is also regarded as a non-financial corporation. Non-financial corporations may be both public and private. |
| General government (S.13) | Public institutional entities engaged in production of non-market goods or provision of services intended for individual or collective consumption, or public institutions engaged in redistribution of national income or wealth. The Central Statistical Bureau of Latvia compiles the list of institutional units of the general government of the Republic of Latvia in accordance with the requirements of the European System of Accounts 2010 (see the list of institutional units of the general government of the Republic of Latvia, section S130000 "Vispārējā valdība (General government)"). |
| Households (S.14) |
Households – a natural person or group of natural persons in the capacity of consumer and producer of goods and provider of non-financial services exclusively for its own final consumption. In the Republic of Latvia, a household is also a self-employed person who has not registered its activity with the Commercial Register of the Enterprise Register of the Republic of Latvia, e.g. an attorney at law, a sworn notary public, sworn auditor, or other natural person who has registered with the State Revenue Service as a tax payer of income from business activities. |
| Non-profit institutions serving households (S.15) |
Separate legal entities that provide goods and services to natural persons or groups of natural persons and that derive resources mainly from voluntary contributions in cash or kind from payments made by general governments and from property income. Such institutions are, for instance, trade unions, professional or educational associations, consumer associations, political parties, churches, religious communities, as well as culture, recreation and sports clubs, charity, support and aid organisations. |
Additional classification
All economic agents are also classified as residents and non-residents (in some reports international organisations have been reported separately). MFIs and non-MFIs, and non-financial corporations are broken down in private and public corporations. Residents are all institutions, including foreign ones, registered and operating in the Republic of Latvia, and private persons whose households are located in the Republic of Latvia and who do not leave Latvia for a period of time of over one year (excluding students). Latvian diplomatic, consular and other representative offices abroad shall also be regarded as residents. Non-residents shall be all institutions registered abroad, and private persons whose households are located outside the Republic of Latvia or who are staying in Latvia for a period of time of less than one year (excluding students). Branches of MFIs registered abroad as well as foreign diplomatic and consular representative offices, those of international institutions and other official representative offices in the Republic of Latvia shall also be considered non-residents.
Public non-financial corporation is a non-financial corporation where the government owns more than 50% of the capital or voting rights, or where it exercises direct or indirect control. Non-MFIs – customers of MFIs other than MFIs, including the general government, other financial intermediaries, financial auxiliaries, insurance corporations and pension funds, non-financial corporations, households and non-profit institutions serving households.