OREANDA-NEWS. November 21, 2007. 1. Amendments and supplement regarding the General Provisions on the Calculation of Capital Adequacy

The Board of the Bank of Lithuania made some amendments to and supplemented the General Provisions on the Calculation of Capital Adequacy adopted to conform to the requirements of the Basle Committee on Banking Supervision, known as Basel II, as well as the EU directives relating to the new framework of the capital adequacy of banks.

The document has been amended and supplemented in accordance with the explanatory notes of the Working Group for the Transposition of Capital Adequacy Directive as requested by the supervisory authorities of the European Union (including the Bank of Lithuania) and market participants, and taking into account requests coming from banks during individual meetings with them to provide more detailed substantiation on individual requirements in the Directive.

The Provisions have also been supplemented with requirements for financial instruments found in the EU legal acts although not used by banks in Lithuania yet: These are assessment of the placement of financial instruments and positions in the trade books of collective investment undertakings, and calculating of capital needs for covering commodity price risk by applying two methods.

2. Permission to register amendment to the Articles of Association of Parex bank.

The Board of the Bank of Lithuania permitted Parex bank to register an amendment to the latter’s Articles of Association in relation to an increase of the Bank’s authorised capital to LTL 180 million as approved by an extraordinary general shareholders’ meeting on 1 October 2007.

At the moment, the Parex bank?s registered authorised capital amounts to LTL 115 million.

AS Parex banka, the sole shareholder of Parex bank, took a decision to raise Parex bank?s authorised capital by LTL 65 million through an issue of 650,000 ordinary registered shares with nominal value of LTL 100 each, to be paid with additional monetary contributions. An offer has been made to the sole shareholder of Parex bank to purchase all the shares of the new issue.

According to the bank, the expected development of the bank?s operations and planned increase of the bank?s authorised capital will have positive effect to the bank?s activities: they are expected to strengthen the competitiveness of the bank, enlarge its share in the lending market and expand the bank product sales volume. Also, the boost of the bank’s authorised capital is expected to have positive impact for meeting prudential requirements and increase efficiency of the bank's risk management system.

3. Issues related to eligible assets for securing credit operations of the Bank of Lithuania

The Board of the Bank of Lithuania approved of the Regulations on Detection, Valuation and Dissemination of Eligible Assets Used to Collateralise Credit Operations of the Bank of Lithuania to come into effect on 19 November 2007. These regulations establish what assets are eligible for securing credit operations of the bank of Lithuania, the ways they will be detected, valued and published. The regulations were worked out in accordance with the requirements of the Eurosystem for eligible assets used to collateralize credit operations.

TARGET2, the Eurosystem’s payment system, the Bank of Lithuania is to connect to will be launched on 19 November 2007. In order to ensure smooth settlement process, the bank of Lithuania will offer a possibility for credit institutions that are to be indirect or direct participants via the Bank of Lithuania in TARGET2 to receive eligible assets-collateralized intraday loans in euros. In addition, by participating in the LITAS-RLS payment system they will retain a possibility to get eligible assets-collateralized intraday and overnight litas credits in the form of repo transactions.

4. Graphic designs of the commemorative coin dedicated to the 550th anniversary of the birth of St. Casimir

The Board of the Bank of Lithuania approved of the results of the graphic (artistic) design competition for the 50 litas commemorative silver coin dedicated to the 550th anniversary of the birth of St. Casimir. The first place went to Giedrius Paulauskis, the second to Rytas Jonas Belevicius and the third to Liudas Parulskis. Seven artists took place in the open competition held to select the best design of the commemorative coin.

The graphic designs of the obverse and reverse of the 50 litas commemorative silver coin dedicated to the 550th anniversary of the birth of St. Casimir created by Giedrius Paulauskis were approved. The edge of the coin will be plain.

The commemorative coin is planned to be issued into circulation in Q1 2008.

5. Approval of the sample of the 50 litas commemorative coin dedicated to XXIX Olympic Games

The Board of the Bank of Lithuania approved the sample of the 50 litas commemorative coin dedicated to XXIX Olympic Games.

The coin was cerated by artists Laura Grainyte, Evaldas Prizginas and Giedrius Paulauskis.

The issuance of the coin into circulation is scheduled for the Q2 2006.