The authorities took a number of important measures to increase the banking sector’s resistance. Though progress was made, the sector remains exposed to vulnerabilities, which can compromise the durability of reforms, consider experts of the independent think tank “Expert-Grup”. These underlined the necessity of strictly fulfilling the commitments made to the International Monetary Fund so as not to endanger the provision of foreign financial support, IPN reports.

In August-December 2016, the experts monitored the main actions taken by the authorities. Among these is the conversion of the guarantees provided to three banks into public debt. From legal perspective, this step was the only one possible following the fulfillment of the commitments undertaken by the Government by issuing guarantees in 2014-2015, Eugen Giletski told a news conference.

The experts warned about the danger generated by the possibility of annulling this law and about the necessity of avoiding issuing guarantees without coverage or a clear plan for using the resources in the future so as to eliminate the instruments by which banking frauds or errors can be transformed into state debt.

Among accomplishments, Eugen Giletski mentioned the signing of the memorandum with the IMF and a series of changes in the shareholder structure and administration of the largest banks and insurance companies. There was drafted a bill to prevent and combat money laundering and terrorism financing. The new framework on financial stability was adopted and put into practice. The law on the central depository was passed. These steps enabled to consolidate the legal framework needed to ensure financial stability in Moldova, contributing to substantial progress in increasing the banking sector’s resistance and to removing the shortcomings that made the banking crisis possible in 2014.

The experts highlighted the necessity of strictly fulfilling the commitments made to the IMF so as not to endanger the provision of foreign financial support. A strategic approach is needed to the shareholdings exhibited for sale by at least two banks and three insurance companies. It is important to fully empower the Administration Board of the National Commission for Financial Markets by naming a new president in accordance with the good practices instituted in the appointment of the National Bank governor.