Financial Monitor 1st isue: results of monitoring recent reforms in the financial-banking industry

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Publishing date: Tuesday, 29 March 2016
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Summary

The monitoring process covered four major actions: (1) the Financial-Banking Package, adopted by the Parliament at 25 February 2016; (2) Project for the Roadmap on priority reforms’ Agenda, adopted at 25 February 2016; (3) Call for selecting the Governor of the National Bank of Moldova (NBM); (4) Technical assistance in the financial-banking sector.

For each of these activities, the authors came up with specific feedback and recommendations. At the same time, experts believe the measures undertaken by now are not sufficient, nor for resolving the banking crisis, nor for preventing similar crises in the future. In particular, the report names the following issues:

  • The problem of appointing all governing bodies at NBM and NCFM (National Commission for Financial Market) is still relevant;
  • Many of the commercial banks still face poor transparency and quality of their effective shareholders, thus negatively influencing their corporate governance;
  • Financial stability framework remains fragmented: the Committee for National Stability remains defunct, the NBM mandate in this respect is still unclear, and crisis prevention system remains weak;
  • There are still many issues that undermine the independence of NBM and NCFM;
  • Many banks remains exposed to entities from “off-shore” zones.
  • The framework for solving banking crises remains deficient, which hampers procedures of liquidating the failed banks;
  • Deposit insurance system is still inefficient and unreformed.

These problems shall be treated with an extensive reform program in the financial banking system. More detials on this program here.


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Tags: Natalia Chitii

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