National Bank governor must be elected meticulously, experts

The financial system is more susceptible to changes than other systems and its credibility diminishes when many modifications take place, expert of IDIS „Viitorul” Sergiu Gaibu has told Info-Prim Neo, commenting on the impact of the replacement of the central bank's governor. Though the Law on the National Bank of Moldova does not say how many times a person can hold office as governor of the bank, it specifies that classically a person can occupy a key state post during two terms. “It is a requirement and an international practice that the governor must be elected meticulously so that the office is held for a longer period of time than other state posts,” the expert said. Alexandru Pelin, the head of the National Bank's Legal Division, said that it is a known fact that when a person works undisturbed and does something, the results of his work are evident. If the 7-year-term in office and the duties of the governor are clearly defined, the governor must have the possibility of fulfilling them completely and then report on the accomplishments. Sergiu Gaibu said that Leonid Talmaci transformed the central bank into an important state institution. He organized it very well and it is more efficient than many other institutions. The new government should now maintain this system viable and develop new areas, the expert said. He referred to three major aspects that the new governor should focus on. The first aspect is the credibility and capacity of the banks to recover the money. “The recovery of money is an area that has not been yet properly defined.” Sergiu Gaibu also stressed the necessity of facilitating the release of loans. The third aspect is greater concentration on the economic interests. “In 2008, the objectives of the monetary system were not adequately set. Increased attention was paid to inflation and this was a wrong goal,” the expert said. According to him, the method of setting the macroeconomic objectives must be consulted with other economic institutions. “The objectives must be modified in a collegial way as the National Bank is indeed a great force that can significantly influence the economy. That's why the objectives must focus on the macroeconomic interest of the country, not the financial interests,” the expert stressed. Under the legislation, the National Bank's governor is elected for a period of seven years by the Parliament. The candidate is fielded by the Head of Parliament and can be proposed for voting only two times. If a candidate does not garner the needed 52 votes, a new candidate is put forward. The governor is dismissed by the vote of 2/3 of the MPs. “Only the Parliament, which is the supreme legislative body, can decide the fate of the governor. Leonid Talmaci had governed the central bank for 18 years. We haven's experienced similar situations. This is something new for us,” said Alexandru Pelin. The second seven-year term in office of governor Leonid Talmaci expired on September 26. The Parliament declared the post vacant and Speaker Mihai Ghimpu proposed his nephew Corneliu Ghimpu for the post. At the sitting when the issue was to be discussed, Ghimpu removed this item from the agenda. He said that he does not want that the professionalism of the candidate is confused with kindred relations. The Alliance for European Integration said a new candidate will be put up in the near future.