Bank of Latvia is becoming worried...

about the state of the credit market. As I wrote a few days ago, Latvian banks have cut the amount of home loans that they issue by a half in last few months.

The chairman of Bank of Latvia, Ilmars Rimsevics, just said the following:

• Bank of Latvia is watching the slowdown in new credits;
• If the slowdown is too fast, it may damage the Latvian economy;
• In that case, Bank of Latvia may consider relaxing the restrictions on new lending.

With the economy being as dependent on foreign credits as in Latvia, it's hard to figure a good way out...