Kristaps Zakulis, who for four years has headed Latvia's financial regulator the Financial and Capital Markets Commissions (FKTK) on Monday handed in his resignation amid mounting criticism that he was not tough enough on money-laundering in the country's boutique banking sector, according to Latvian Public Broadcasting English-language service. 

"Since the chairmanship of FKTK is a position of trust, I believe that my resignation will reduce the suspicions, rumors and shadows of doubt cast over over FKTK. I never regarded this position as an end in itself," Zakulis said in a public statement. 

Despite coverage for years of money-laundering suspicions among the banks which cater largely to depositors from Russia and other former CIS countries, the authorities in Riga consistently denied Latvia had a major problem with money laundering. "However, evidence pointing to numerous examples including the notorious Magnitsky case in Russia and the recent disappearance of one billion dollars from Moldova via Latvian banks has finally forced FKTK to act - though too late to save Zakulis' job", the broadcasting service says. 

Previously, a report by independent TV station TV3 claimed United States officials, dissatisfied with efforts to tackle money-laundering in numerous high profile cases, had demanded Zakulis' head.

Tuesday, February 2, the Financial and Capital Markets Commission (FKTK) has announced a major audit of the country's 17 boutique banks in an effort to reassure the US and EU that the sector is not awash with laundered money.