A joint International Monetary Fund(IMF)-World Bank Financial Sector Assessment Program (FSAP)mission visited Lithuania during November 4-15, 2001 toundertake an assessment of the financial sector. Theprincipal objective of the mission was to assist theauthorities in identifying potential vulnerabilities in theLithuanian financial system and obstacles to its futuredevelopment. Financial activity is likely to grow markedlyin years to come, but a large share of the intermediation ofsaving and investment will not take place locally, but willinstead involve a specific pattern of domestic andcross-border financial activity. Institutions in theLithuanian financial system comprise banks, leasingcompanies, insurance companies, and securities firms. Theinsurance sector is small but likely to developsignificantly in the years ahead. The payment system handlesonly a limited number of transactions and has shown itselfto be robust in previous periods of stress. The Lithuanianfinancial system is likely to undergo significant furtherdevelopment and change, driven mainly by stepped-up domesticfinancial system reform and the increasing integration amongfinancial markets in Lithuania and other countries inEurope. Lithuania appears committed to fighting moneylaundering and terrorist finance. Controls on moneylaundering in the insurance and securities sectors fall wellshort of those in the banking sector.
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