Moldovan experts propose five objectives for expanding national financial system

Chisinau, 16 April /MOLDPRES/ – The development and modernization of the financial system must remain a priority on agenda of upcoming Government, according to economists of the Independent Analytical Centre Expert – Grup. The new issue of the Monitorul Oficial Centre, launched today, has five objectives of reforming the financial system, which, once implemented, "could transform the financial environment into a catalyst for economic growth."

"The current terms of financial system offer the right moment to continue reforms in direction of development and modernisation," said economist Dumitru Pintea, co – author of publication. He mentions that "unlike 10 years ago, most of the system is controlled by foreign banks or financial groups, with extensive experience in regional or even global finance. Also, the financial position of banks has improved, making them much better capitalised, sufficiently liquid and profitable."

However, in publication, in addition to these positive trends, there are also a number of difficulties that have the same roots in the banking crisis. The granting of state guarantees for lending to banks led to an excess of liquidity, the sterilisation of which involves enormous costs for the National Bank of Moldova (BNM). Moldova remains behind its neighbours in terms of financial inclusion, with only 44 per cent of population having a bank account.

The current issue of the Financial Monitor comes with a series of policy recommendations on directions for development of national financial system. Firstly, they aim to strengthen the capacity of financial institutions to meet the demands and expectations of business, Government, or households in mobilising capital. It also focuses on eradicating the informal economy by increasing financial inclusion, improving payment systems and enhancing the financial skills of population. Last but not least, Expert – Grup believes that the financial system must become a solid source of protection for financial service users, a stability factor for public finances and credibility for international environment.

The economists believe the next Government should focus on maintaining the stability of financial system by preventing over – indebtedness of population, improving oversight mechanism of non – banking financial system, developing a deposit guarantee mechanism. Other objectives are to ensure the financial system integrity, develop resources with a long maturity, involve financial system in eradication of informal economy and increase the level of financial education and protection of consumers of financial services.