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Expert-Grup offers reasonable ways to reform the National Committee for Financial Stability.

Expert-Grup offers reasonable ways to reform the National Committee for Financial Stability.

The expert of the Independent Analytical Center Adrian Lupusor prepared the analytical note "How can it be reasonable to reform the NCFS?" It says that the disclosure of the bank thefts and the banking crisis of 2014-2016 gave a lot of lessons, the main one of which is reduced to the need for reforming the NCFS. The committee was established in 2010 and proved to be ineffective in preventing and resolving the banking crisis. Moreover, in view of its politicized format and unclear authority, NCFS was one of the main institutional gaps that allowed destabilizing the banking system. The expert notes that today, in general terms, there is a consensus on the need to reform the NCSF, but until now this issue has been promoted slowly. So, one of the important measures was the change in the composition of the Committee in October 2016. (The Prime Minister, the Chairman of the Parliamentary Commission on Economy, Budget and Finance and the Secretary of State were excluded from its membership). This was done in order to reduce the susceptibility of the institution to political influence. Another important measure was the inclusion in the Law on the NBM in April 2016 of additional powers allowing the National Bank to take measures for financial stability in the event of crisis situations. However, according to the expert, despite this, the framework of financial stability remains imperfect. So, the powers of the committee are still unclear, the institution focuses more on the settlement than on preventing crises, in some places the powers of the committee are superimposed on the powers of other institutions. The expert notes that the powers of the National Bank in matters of financial stability remain incomplete. At the same time, the committee is authorized to state the fact of a systemic crisis, and it is this that "launches" the further actions of the NBM. At the same time, the criteria underlying this decision were not clearly defined. Last but not least, there is an institutional and regulatory vacuum with regard to macro prudential supervision, which serves as a key element for any framework of financial stability. "The reasonable reform of the NCFS presupposes the elimination of current shortcomings, taking into account the lessons learned from the previous failures of this institution, and also taking into account the experience of the EU countries. In particular, the reform is aimed to clarify the powers of the NCFS, as well as the order of activities and the interaction of its members. The committee should mainly focus on preventing financial crises, improving the effectiveness of communication and coordinating the actions between the institutions on which the financial stability depends; and it should not undermine the independence of its members, it should not be endowed with powers that overlap with the powers of its members," Lupusor believes. // 20.03.2017- InfoMarket.

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