ABM president proposes creating crisis cell

The president of the Association of Banks of Moldova (ABM) Dumitru Ursu suggested instituting crisis mechanisms that would help solve the problems faced by the national economy. Ursu made this and other proposals during a meeting of the Prime Minister elect Vlad Filat and representatives of the civil society and the business circle on September 21, Info-Prim Neo reports. According to the ABM president, the situation in the banking sector reveals in fact the general economic situation in the country. It cannot be an island of stability in the ocean of turbulence faced by the economy. The money supply at the start of the year fell by 8%. The volume of loans granted to economic entities and the population decreased by 2 billion lei. Ursu made suggestions that could be used while formulating the government program. He proposed setting up a crisis cell similar to that of 1998, which would take immediate steps to overcome the consequences of the crisis in the financial, banking and other sectors. “The ABM submitted proposals concerning lending to the national economy, which will not be able to recover without loans. We think there should be created an agency that would administer the so-called toxic loans. If we want the real sector to receive the necessary volume of loans, the banks should be also supported. Another proposal concerns the stability of the financial sector on the whole, not only of the banks, but also of the nonbanking sector. We should implement the EU's recommendation to create financial stability committees that include financial market regulators, in Moldova's case – the National Bank and the National Commission on the Financial Market, as well as representatives of the Ministry of Finance and the Ministry of Economy and Trade. Usually, these committees are very efficient as they analyze the risks and work out measures aimed at preventing and overcoming them by correlating the actions taken by the regulators,” Dumitru Ursu said. The taxing of the people's and legal entities' bank accounts for periods of over three years since 2010 is another problem highlighted by Ursu. According to him, this measure should be postponed for 3-5 years as the volume of bank deposits fell by over 2 billion lei. He also suggested rising the sum of 6,000 lei paid to persons that deposit money from the deposit guaranteeing fund when a bank goes insolvent so as to increase the banking sector's credibility. This fund could be augmented through different state instruments and from the resources provided by foreign donors.