Limba romana                                                                        

Office of the IMF Resident Representative
Chisinau, Republic of Moldova
 

PRESS STATEMENT

Joint IMF/World Bank FSAP Mission Concluded Its Work
on October 12
 

An IMF/World Bank team headed by Ms. Judit Vadasz has performed an assessment of Moldova’s financial sector during October 1-12, 2007.

The mission met with the First Deputy Prime Minister, the Minister of Economy and Trade, the Minister of Finance, the management and staff of the National Bank of Moldova, the National Commission of the Financial Market, the Moldova Stock Exchange, the National Securities Depositary, the Licensing Chamber, the Parliament’s Commission on Economy, Budget, and Finance, as well as representatives of most Moldovan banks, key actors in the insurance, securities, and audit market, representatives of USAID and the European Commission’s Delegation to Moldova.

The mission was pleased to conclude that, overall, the financial sector, and particularly the banking sector, has undergone positive evolution since the 2004 FSAP. Nevertheless, the macroeconomic environment, particularly the dependence on remittances, inflationary pressures, vulnerability to sharp increases in energy prices, and rapid credit growth could pose some risks to the financial system.

The mission has found that developmental needs of the financial sector as a whole are substantial, as evidenced by lagging benchmarks against Moldova’s more advanced peers. The share of the financial sector in the economy is small, markets are shallow, and some elements of the infrastructure are missing. These indicators are much worse for the insurance and the securities sector than for banking. The mission hopes that these issues will be tackled closely once the newly established National Commission on Financial Markets (NFCM) will reach its full capacity.

The mission has noted that the NBM has been trying to solve the bank ownership issues raised during the 2004 FSAP as a significant vulnerability and achieved partial success. Allowing the purchase of domestic banks by reputable foreign investors is an encouraging sign, although the privatization of Banca de economii has been lagging.

Another conclusion of the mission was that major improvements have been registered during the Basel Core Principles Assessment if compared to the 2004 FSAP.

The assessment the mission performed indicated that the recently revamped payment system architecture constitutes a welcome step forward. The new Interbank Payment System (AIPS) has been completed and the full assessment of the BIS Principles for Systemically Important Payment Systems found that the large majority of the core principles are fully observed.

The mission will produce a full report including its findings and policy recommendations that will be shared with the authorities in due course.

October 16, 2007