Government moves to seize banks in Lithuania and Latvia have affected Latvia's borrowing plans and raised questions about the stability of the Baltic banking sector

Government moves to seize banks in Lithuania and Latvia have affected Latvia's borrowing plans and raised questions about the stability of the Baltic banking sector, but officials and analysts said that if the action is handled adroitly, the damage should be limited to the institutions directly involved.

The Lithuanian government last week took over that country's fifth-largest bank, Bankas Snoras, while neighboring Latvia followed by suspending the operations of Latvijas Krajbanka, a unit of the Lithuanian bank.

The Lithuanian authorities said the seizure of Bankas Snoras was due to it having assets that were smaller than its liabilitie