Publication: Monitor Volume: 2 Issue: 3

Lithuanian prime minister Adolfas Slezevicius withdrew his savings from LAIB bank only days before it was declared insolvent and the National Bank froze its accounts. Addressing the country by radio yesterday, Slezevicius defended his personal financial dealings and said he had no intention of resigning his post. He said he had terminated his account in order to preempt any charges that he would benefit from government action to rescue LAIB. The prime minister will open a new account at the same bank when it resumes operations in order to convince depositors that their frozen accounts are safe. He vowed that the government would rescue LAIB as well as another insolvent bank, Litimpex. Slezevicius charged that attacks on him concerning LAIB were aimed at splitting the government and the ruling Democratic Labor Party (LDLP), of which he is also head. (17)

The banking scandal erupted December 20 when Lithuania’s two largest commercial banks, LAIB and Litimpex, were declared insolvent. Their operations were then suspended by the National Bank and their directors arrested on charges of misappropriation of funds. Slezevicius had prematurely terminated his fixed-term account with LAIB on December 18. His action triggered criticism in the press and angered thousands of depositors when it became public. The row gathered momentum during the holidays. Both Lithuanian state television and the leading daily Diena, known for its contacts with the ruling party, reported January 2 and 3 that President Algirdas Brazauskas had asked Slezevicius to explain his conduct. Although the president was reported to have said that the prime minister might resign, other reports indicate that the LDLP leadership is not prepared to ask for his resignation.

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