Efficient Capital Markets and Portfolio Investment Government policies do not interfere in the free flow of financial resources or the allocation of credit. Commercial credit is restricted to high interest, short-term trade related loans which are in theory available to foreigners but in practice totally unattractive to foreign investors with other sources of credit available. Unsustainable deposit interest payments, inadequate banking laws and regulations as well as risky lending practices and insider trading were the causes of the crisis. Since then, conditions have improved considerably, and all Lithuanian banks weathered the Russian financial crisis successfully in fall 1998. There have been no reports of political violence or politically motivated damage to property since 1991.
Civil disturbances are unlikely and there are no signs of any nascent insurrection movement.
Bilateral Investment Agreements Lithuania has established commercial relations with more than 160 countries. Additionally, agreements on the most favored nation's trade status have been signed with 22 countries. The United States and Lithuania have entered into a trade agreement that includes protection of intellectual property. A bilateral investment treaty between the U.S. and Lithuania has been initiated. Labor Lithuanian labor is inexpensive and highly qualified.