National Bank of Moldova trying to assert itself on capital market, Moldovan economists say

Chisinau, 16 March /MOLDPRES/-According to an analytical note carried out by the economists of the Institute for European Policies and Reforms (IPRE), the creation of a new depository owned and supervised by the National Bank of Moldova (BNM), which only has tangential connection to the capital market, runs counter to some principles providing for the separation of responsibilities between institutions in charge.

After analyzing the draft law amending and supplementing some legislative documents, adopted by the parliament in first reading, economists ascertained that BNM is trying to assert itself on the capital market and simultaneously become a regulatory authority and partial owner of its infrastructure. Among other things, this draft law provides for the activity of the central depository, which is part of the capital market infrastructure and is predominantly responsible for clearing and discounting financial tools.

“These amendments are actually trying to put an end to the long battle for the right to own the register of security holders. This activity is currently done by register societies, represented by authorized private entities, supervised by the National Commission for Financial Market (CNPF). Moldova is the only country in Europe, where security holders’ registers are not kept by single central depositories. BNM’s real intention is to keep the register by taking control over the single central depository,” IPRE economist, Eugen Ghiletchi said.

“The nationalization of the central depository could also be justified by raider attacks over the last years. It is important to emphasize that register societies and courts were the main factors influencing these attacks. As a consequence, register societies must certainly disappear, as they are outdated, while the creation of a single central depository with an advanced and strong security system is imperative,” the analytical note reads.

IPRE believes the current depository should be transformed into a single central depository, created by authorized private entities and supervised by CNPF. The creation of a depository owned and supervised by BNM, which “only has tangential connection to the capital market, runs counter to some principles providing for the separation of responsibilities between institutions in charge”.

“CNPF is currently regulating the capital market. BNM connects through this sector only through its responsibility to supervise banks, which are also brokers on the securities market. Banks and brokers are shareholders of the stock market (investment societies). For its part, the stock market, brokers and some of the banks are shareholders of the depository. They will be directly hit by BNM’s intervention, which will surely cause unplanned implications and expenses,” IPRE economists conclude.

(Reporter V. Bercu, Editor L. Alcaza)