Latvia’s third-largest bank ABLV is facing collapse, according to the European Central Bank (ECB)

Rescue was not in the public interest, the ECB and the Single Resolution Board, the European Banking Union’s resolution authority, announced on Saturday night.

Previously, the Latvian Finance Minister Dana Reizniece-Ozola had said that the ABLV was not systemically relevant. Therefore, the government would not save them in case of collapse. The Latvian financial regulator was also worried on Friday, the crisis in the ABLV could spread to the entire Latvian banking landscape. There is no panic in the market, said authorities boss Peters Putnins.

“Given the significant worsening of its liquidity, the bank is unlikely to be able to service its debt and other obligations when they mature,” the ECB said at night.

The institute is accused of being involved in money laundering by customers from neighboring Russia and Ukraine. As around 40 percent of Latvian bank deposits come from abroad, worries arose that contagion could exist for other banks. The allegations against ABLV – which rejects them – were raised by the US government. The financial position of the institute then sharply increased. Within days, deposits amounting to 600 million euros flowed away.

From the country’s central bank, the ABLV received nearly € 300 million in aid this week. The ECB had ordered that the local overseers until further notice prevent all disbursements of the bank. The institute has been given a deadline until this Friday to close the funding gap.