Latvia Takes Over Its No. 2 Bank

RIGA, Latvia The Latvian government announced on Saturday the surprise takeover of the country's second-largest bank, Parex, as the global financial crisishit the small Baltic state whereeconomic growth has fallen sharply.

Latvian Prime Minister Ivars Godmanis said after a late night government meeting that if necessary the country would approachthe International Monetary Fund or the EU for aid in the future.

The government said it was forced to take 51 percent of Parex, one of the first Latvian banks to be formed after the collapse of the Soviet Union, as it hit problems in the global liquidity crunch.

"We have to do everything in order not to allow any troubles, not only for concrete banks, which are important to the system due to their size in Latvia, but for the banking system as a whole," Godmanis told reporters.

He saw no need for action to support other banks apart from Parex, which had assets of 3 billion lats ($5.42 billion).