A view of an entrance of Sweden's central bank in Stockholm, Sweden, August 12, 2016. Picture taken August 12, 2016. REUTERS/Violette Goarant

LONDON (Reuters) - Sweden is likely to become cashless within the next five years, the deputy governor of the country’s central bank, Cecilia Skingsley, predicted on Tuesday.

The use of notes and coins has been declining in Sweden for years and instant mobile phone payments and other new technologies means it is has now dwindled to almost insignificant levels.

“Sweden will probably become cashless in 3-5 years,” Riksbank deputy Skingsley said at a London banking conference.

Physical cash would not be banned, but so few people and firms were likely to need to use it beyond that timeframe that it would become practically useless.

Central banks themselves will also need to evolve to adapt to what will be a much changed landscape. They many introduce their own digital currencies — something the Riksbank is looking into — and continue doing what they have been doing for best part of the last 200-300 years.

Alternatively they may develop into something that regulates and controls “privately created” money by firms looking to dominate global payment markets.

“If we don’t do anything we are looking at a future where money will be spontaneously privatized,” Skingsley said.

“The upside of becoming the Google of money creation or payments is very attractive and is something all of us (in the central bank/regulatory sphere) think we have to be very firm on the boundaries of.” </s> Latvia's central-bank chief has been released from custody on bail hours after the Baltic country's anticorruption agency accused him of receiving at least 100,000 euros ($125,000) in bribes.

The Corruption Prevention and Combating Bureau (KNAB) said on February 19 that no formal charges had been filed against Bank of Latvia Governor Ilmars Rimsevics, who was detained by police over the weekend.

Hours after the statement, the Delfi news portal showed video of Rimsevics leaving KNAB premises in Riga with his lawyer.

"I categorically disagree with [the charges]," Rimsevics said in the video to reporters at the scene.

Despite the denial of wrongdoing, Prime Minister Maris Kucinskis has called on Rimsevics to recuse himself from his duties while a criminal investigation against him is carried out.

Rimsevics has held the post since 2001 and is also a member of the European Central Bank's (ECB) governing council.

Latvia is a European Union member and uses the euro as its currency.

KNAB did not elaborate on the charges against Rimsevics, but AP reported on February 19 that executives at Latvian bank Norvik said the central-bank chief sought to extort money from their firm for years.

According to the news agency, Norvik has filed an international complaint against Latvia in which it claims a "senior Latvian official" sought bribes from the bank and abused his power. Norvik's CEO, Oliver Bramwell, told AP, "The high-level official mentioned in our request for arbitration is Rimsevics."

Latvia's financial sector is in upheaval with the investigation and a crisis at ABLV Bank, the country's third-largest bank by assets.

Latvia's financial regulator has ordered the bank to cease all payments after its liquidity position deteriorated sharply amid U.S. accusations of money laundering and breaching sanctions aimed at thwarting North Korea's weapons program.

The Treasury Department said in a statement last week that ABLV also facilitated transactions linked to "large-scale illicit activity connected to Azerbaijan, Russia, and Ukraine."

To shore up ABLV's finances, the central bank has said that it will loan the bank 97.5 million euros ($121 million) against "a reliable pledge of highly liquid securities."

With reporting by AP, Reuters, and Bloomberg </s> HELSINKI (AP) — Latvia's anti-corruption agency says it suspects the nation's central bank chief of demanding and receiving bribes of at least 100,000 euros ($125,000) and has started a criminal investigation against him.

The agency said Monday that no formal charges have so far been filed against Ilmars Rimsevics, who is also on the top policymaking council of the European Central Bank.

On Friday, the agency raided the office and a property of Rimsevics and detained him on Saturday.

Prime Minister Maris Kucinskis said after an extraordinary Cabinet meeting Monday that the central banker will face "restrictions" to be announced later.

He was quoted by the Baltic News Service as saying: "At the very minimum, he will be banned from continuing in office."

Rimsevics has served as Bank of Latvia's governor since 2001. Latvia joined the euro-zone in 2014.

Meanwhile, Latvia's financial regulator has ordered the crisis-struck ABLV Bank to cease all payments on the request of the European Central Bank amid U.S. accusations of money laundering and breaching sanctions on North Korea.

The ECB said Monday that the Financial and Capital Markets Commission of Latvia has imposed "a prohibition of all payments by ABLV Bank on its financial liabilities" until further notice.

The ECB noted that ABLV has seen a sharp deterioration of its financial position in recent days.

Latvia's central bank said separately that it would loan ABLV 97.5 million euros ($121 million) against "a reliable pledge of highly liquid securities" instead of 480 million euros ABLV had requested.

ABLV is Latvia's third largest bank by assets.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. </s> The European Central Bank and Governing Council member Ilmars Rimsevics accused Latvia of infringing central-bank independence by barring him from his post amid a probe into bribery accusations that he denies.

The Frankfurt-based ECB and the governor of Latvia’s central bank have both appealed at the EU’s highest court against restrictions that stop Rimsevics from exercising his office. The EU Court of Justice released details on the cases on Monday.

The Baltic country’s banking sector was rocked in February when the U.S. Treasury proposed banning the country’s third-biggest lender, ABLV, and days later Rimsevics was detained by the anti-corruption bureau for 48 hours. He was accused of being part of a group that solicited and received bribes of at least 100,000 euros ($119,340). The bank and Rimsevics deny all accusations of wrongdoing.

The ECB claims that Latvian authorities broke the law by imposing stringent bail terms on Rimsevics’ work before a ruling on the case by an independent court, the case summary shows. The ECB also says the authorities haven’t provided all the information on the case.

In a separate filing, the Latvian governor said he has been “unlawfully” prevented from carrying out his role. EU law states that central bank heads can only be removed if they can no longer perform their duties or if found guilty of “serious misconduct.”

Spokesmen for the ECB and Latvia’s anti-corruption bureau declined to comment. Rimsevics’s lawyer Saulvedis Varpins wasn’t immediately able to comment, and Latvian Prime Minister Maris Kucinskis’s spokesman Andrejs Vaivars didn’t immediately respond to a request for comment.

The ECB’s concerns “are very understandable, but I think just as understandable will be our answers,” the prime minister said in an interview with LTV on April 10. “I’m convinced that justice is on our side.”

Rimsevics, still officially a member of the ECB’s Governing Council, is barred from exiting the country and can’t even appoint a substitute. That means Latvia -- a euro-area member since 2014 -- has been unable to have a formal say on policy decisions since February. Deputy Governor Zoja Razmusa has attended as an observer at the meetings, where decisions are usually taken by consensus.

Ironically, the Governing Council will hold its next meeting in Riga, Latvia’s capital, on June 14. That could be a critical session as policy makers are expected to start debating how and when to end their 2.6 trillion-euro bond-buying program.

The ECJ has been asked by the ECB to issue an interim ruling that could soften the governor’s restrictions as early as this week.

Also on Monday, ABLV announced it had appealed at the Luxembourg-based EU court against the ECB’s decision to declare it was on the verge of failure. The bank was then closed under Latvian law after the EU bank-resolution authority said the lender was too small to warrant a rescue.

“ABLV and its Luxembourg subsidiary were neither illiquid nor was their illiquidity imminent in the foreseeable future,” the bank said in a statement announcing the filing of the case. They were “in an extraordinarily strong financial position not only as regards their capitalization and profitability but also and particularly as regards their liquidity.” </s> Image copyright Reuters Image caption No official reason has yet been given for Mr Rimsevics' detention

The head of Latvia's central bank, Ilmars Rimsevics, has been detained by the country's anti-corruption agency.

His home and offices at the Bank of Latvia were both raided by officers.

The country's Corruption Prevention Bureau gave no details about its investigation, or the nature of the raids.

Latvia's Prime Minister, Maris Kucinskis, has called an emergency cabinet meeting on Monday - but added there was no apparent national threat.

"There are no signs that there is any threat to the Latvian financial system," he said in a statement.

He said neither he, as prime minister, nor any other officials had any reason to interfere with the anti-corruption agency's work.

"The institution works professionally and accurately," he said, pledging the government's full support and saying there would be no outside influence.

The Bank of Latvia said it could not comment on the investigation, but said it had a "zero tolerance policy in respect of corruption and other illicit activities".

It said the bank's operations were unaffected by the investigation, and that it would open on Monday as usual.

A number of banks in Latvia have been subject to investigations in recent months.

In July 2017, two banks were fined for allowing their clients to circumvent international sanctions preventing payments to North Korea.

Another, Norvik Bank, is embroiled in a dispute with the state over what it calls "unfair, arbitrary, improperly motivated and unreasonable regulatory treatment".

Precisely what that entails has not been disclosed.

It is unclear if either of the investigations are in any way linked to the detention of Mr Rimsevics.

In his capacity as the governor of Latvia's central bank, Mr Rimsevic is also a member of the European Central Bank's governing council.

Latvia became the 18th member of the Eurozone on 1 January 2014. </s> The European Central Bank halted payments by ABLV, one of Latvia's biggest banks, on Monday, amid accusations from the United States Treasury that the lender had been involved in money laundering and unauthorised transactions with the heavily sanctioned nation of North Korea. The ECB said it had instructed Latvia's banking supervisor to impose a moratorium on the bank, freezing all payments by the bank on its liabilities. "In recent days, there has been a sharp deterioration of the bank's ... </s> RIGA, Feb 19 (Reuters) - The head of Latvia's central bank should resign following his detention by the anti-corruption agency, Prime Minister Maris Kucinskis said on Monday.

Latvia's Corruption Prevention and Combating Bureau detained Governor Ilmars Rimsevics on Saturday after searching his house and office.

"I can't imagine that a governor of the Bank of Latvia detained over such a serious accusation could work," Kucinskis told Latvian television .

"So in his case, of course, I think that he should himself (resign)."

Rimsevics' lawyer has said the detention of the central bank Governor is unlawful.

The government is holding an emergency meeting on Monday to discuss the case and the anti-corruption agency will hold a news conference at 1100 GMT.

Neither the anti-corruption agency nor Rimsevics' lawyer has commented on the reason for his detention.

The Latvian central bank is an independent institution and Rimsevics has been its head since 2001. He has been a member of the European Central Bank's Governing Council since January 2014, when Latvia adopted the euro. (Reporting by Gederts Gelzis; Editing by Toby Chopra) </s> Europe’s first national government-backed experiment in giving citizens free cash will end next year after Finland decided not to extend its widely publicised basic income trial and to explore alternative welfare schemes instead.

Since January 2017, a random sample of 2,000 unemployed people aged 25 to 58 have been paid a monthly €560 (£475) , with no requirement to seek or accept employment. Any recipients who took a job continued to receive the same amount.

The government has turned down a request for extra funding from Kela, the Finnish social security agency, to expand the two-year pilot to a group of employees this year, and said payments to current participants will end next January.

It has also introduced legislation making some benefits for unemployed people contingent on taking training or working at least 18 hours in three months. “The government is making changes taking the system away from basic income,” Kela’s Miska Simanainen told the Swedish newspaper Svenska Dagbladet.

The scheme – aimed primarily at seeing whether a guaranteed income might incentivise people to take up paid work by smoothing out gaps in the welfare system – is strictly speaking not a universal basic income (UBI) trial, because the payments are made to a restricted group and are not enough to live on.

But it was hoped it would shed light on policy issues such as whether an unconditional payment might reduce anxiety among recipients and allow the government to simplify a complex social security system that is struggling to cope with a fast-moving and insecure labour market.

Olli Kangas, an expert involved in the trial, told the Finnish public broadcaster YLE: “Two years is too short a period to be able to draw extensive conclusions from such a big experiment. We should have had extra time and more money to achieve reliable results.”

The idea of UBI – appealing both to the left, which hopes it can cut poverty and inequality, and to the right, which sees it as a possible route to a leaner, less bureaucratic welfare system – has gained traction recently amid predictions that automation could threaten up to a third of current jobs.

The Finnish finance minister, Petteri Orpo, told Hufvudstadsbladet he was looking into trialling alternative welfare schemes, including a universal credit system similar to that being introduced in the UK, when the basic income pilot ends. </s> Finland is to scrap a pioneering universal wage scheme that paid people a flat monthly fee rather than unemployment benefits.

The Finnish Social Insurance Institute - known as Kela - introduced a two-year trial of Universal Basic Income (UBI) in January last year, which saw the government pay citizens a monthly stipend of €560 (£490).

The trial was heralded as a possible solution to a future in which there will be increasing amounts of automation and rising inequality.

Across the country, 2,000 unemployed people between the ages of 25 and 58 were randomly selected for the experiment, which received international recognition for its potential impact on social security and was a European first.

Facebook CEO Mark Zuckerberg and his Tesla and SpaceX counterpart Elon Musk were among the high-profile supporters of UBI, but the Finnish government has announced it intends to scrap the project.

Under a full roll-out of UBI, all citizens - not just those looking for a job - would have been guaranteed the same monthly payment.

Its backers say it would help tackle poverty and inequality as people would not have to worry about making ends meet - and it would encourage the unemployed to find work.

But the government has rejected a request from Kela for additional funding to expand the trial to encompass a selection of people currently in work, and has decided to cancel the project once the trial ends in January 2019.

Miska Simanainen, a researcher at Kela, told Swedish newspaper Svenska Dagbladet that the government would now pursue changes that would "take the system further away from a basic income".

His colleague, Olli Kangas, told the Finnish broadcaster YLE that the scheme required a longer trial before any final decision was made.

"Two years is too short a period to be able to draw extensive conclusions from such a big experiment," he said.

"We should have had extra time and more money to achieve reliable results."

In December, Finnish MPs voted through legislation to make some unemployment benefits contingent on people taking part in training or some form of work for at least 18 hours over the course of three months.

Finance Minister Petteri Orpo has told Swedish newspaper Hufvudstadsbladet that he was considering a number of alternatives to UBI, including a universal credit system similar to the one introduced in the UK.

In the meantime, Kela has pledged to remain in touch with the 2,000 people involved in the UBI trial to analyse its long-term impacts.
The deputy governor of Sweden's central bank, the Riksbank, says that the country is likely to become a cashless society within the next three to five years.