Moldovan Expert-Grup centre says reforms accelerated, impact lingers

Chisinau, 26 July /MOLDPRES/ - After more than three years of banking crisis, Moldova’s financial crisis continues to be subjected to a comprehensive reform process, which records extension not only at banks, but also other non-bank institutions, according to the seventh issue of Monitorul Financial (Financial Journal), launched by the Expert-Grup Independent Analytical Centre.

Experts said that, being boosted by the pressure of the commitments within the memorandum with the International Monetary Fund and the Association Agreement with EU, the reforms carried out so far have ensured improvement of the situation in banks; yet, the main constraint remains their capacity to adapt to the new requirements, especially as regards the crediting activity.

„Although ambitious and extremely necessary, the process of implementation of the Basel III standards represents a challenge both for commercial banks and their clients and for the regulator,’’ the author of the publication, Dumitru Pintea, has said. According to Pintea, ‘’the rules become much stricter for the banks and economic agents seeking financing with significant implications on the business model and even the profitability. For the regulator, the scope of the concerned process shows the importance of strengthening the operational, technical and human capacities, in order to efficiently implement the new banking legislation.’’   

In another context, the expert said that, against a background of tougher crediting standards, the duty of banks’ intermediation remains stagnating, leaving room for  competitors from the non-bank financial sector. In these conditions, besides the tendency of migration of the demand of credits to other less regulated sectors and in the context of less transparent and sometimes even abuse crediting practices, a low level of protection of consumers private persons is recorded.

Without interventions, this situation might trigger the deterioration of the capacity of reimbursing consumption loans and an increase in bad assets of financial institutions, Dumitru Pintea stressed.  

An important debt which in a way diminishes the reforms’ impact deals with the lack of tangible results in the process of investigating bank frauds. ’’Beyond the publicizing of the investigation plan, the effective recovery of the purloined money does not register significant progress, with a first installment of redeeming VMS issued by the Finance Ministry already signaled, including with public money,’’ the economist said. ‘’In this respect, to speed up the process of investigation and to enhance the reliability of actions undertaken, it is important that the National Bank of Moldova, as primary source of information and relations with regulators from jurisdictions where the money was transferred, becomes active part in this process,’’ Dumitru Pintea added.    

(Reporter V. Bercu, editor A. Raileanu)