A member of the European Central Bank’s rate-setting committee, Ilmars Rimšēvičs, was detained over the weekend by Latvia’s anticorruption agency as part of a criminal probe.
Rimšēvičs, governor of Latvia's Central Bank, was being held at a state police station after agents raided his office and a property belonging to him, according to published reports.
The news represents a fresh hit to the reputation of the Baltic nation’s financial sector, which already had been dealing with money laundering allegations brought against Riga-based ABLV Bank.
The ECB on Monday said it had halted all payments to the lender, Latvia’s third largest by assets. That move comes a week after the U.S. Treasury Department charged ABLV with laundering billions of dollars in illicit funds, including for companies tied to North Korea’s banned ballistic-missile program, a Wall Street Journal report noted.
Latvian Prime Minister Maris Kucinskis said on Twitter that there was no indication of a threat to Latvia’s financial system. He also announced a special cabinet meeting on Monday to analyze the detention of Rimšēvičs, who has been part the ECB governing council’s since 2014, when Latvia adopted the euro EURUSD, +0.1289% .