Investing in bank capital will be safer, NBM governor

Investments in bank capital in Moldova will enjoy better legal protection, as transferring portions larger than 5 percent of interest from one shareholder to another will be only allowed with the National Bank of Moldova's written consent, under a recent amendment to the Law on Financial Institutions. Commenting on the measure in an interview with Radio Moldova, NBM Governor Dorin Dragutanu said: “This amendment was needed in order to give to those investing in bank capital the confidence that large transactions with bank stocks are monitored and are done only with the NBM's prior consent”. Dragutanu argued that, specific entities as they are, banks mostly work with money borrowed from depositors, individuals and companies, and this requires banks to be very careful when administering those funds and take into account all the potential risks. “Decisions in banks can be influenced by shareholders that own significant stocks. So the NBM, as an authority that supervises the banking sector, has to ensure that the new shareholders who acquire stocks from previous owners are able to correctly administrate the money attracted from depositors. This explains the necessity for any significant transactions with bank capital to be performed only with the NBM's prior written consent”, said Dragutanu.