Background
PNB Banka (formerly Norvik Banka) was a small Latvian bank with a history of supervisory findings and disputes with its national regulator. In 2019, at Latvia's request, its supervision was transferred directly to the ECB.
Failure and outcome
An ECB on-site inspection determined that the bank's assets were insufficient to cover its liabilities. On 15 August 2019 the ECB declared the bank failing or likely to fail — the first such determination grounded in balance-sheet insolvency rather than an acute liquidity run. The SRB assessed resolution against the public interest test the same day and concluded, given the bank's size and the substitutability of its services, that normal insolvency proceedings were the appropriate path. A Latvian court opened insolvency proceedings in September 2019, and covered deposits were repaid through the national deposit guarantee scheme.
Why the case matters
PNB Banka is the clearest illustration of the framework working as designed for a small bank: European-level determinations, followed by a national insolvency with depositor protection, and no interruption to financial stability. Together with ABLV and the Veneto banks, it fixed the pattern that, before the CMDI reform, resolution in the banking union was in practice reserved for large or clearly systemic institutions.