Moldovan authorities reiterated to IMF the commitment to ensure the independence of the NBM and the willingness to take steps to further strengthen the NBM institutional autonomy and governance
The letter to the IMF Managing Director, Kristalina Georgieva, on behalf of the Moldovan Government and the National Bank of Moldova (BNM), confirmed the commitment to ensure the independence of the NBM and noted that amendments to the Law on the NBM in 2014-2016 have strengthened key legal guarantees, including its autonomy, governance structure, transparency and accountability. To protect the NBM's financial autonomy, legislative changes that would have led to the repeal of the state-guaranteed bond issuance law in place since 2016 were successfully appealed to the Constitutional Court. "We are fully committed to protecting the independence of the NBM to ensure that it effectively carries out its functions and its primary objective of ensuring and maintaining price stability, promoting and maintaining a financial system based on market principles, and supporting the country's economic policies. To achieve this goal, the Executive Board of the NBM has been strengthened by filling the vacant positions of vice presidents in accordance with the professional, conscientious and procedural requirements of the NBM (preliminary action) Act," the letter states. It goes on to say that the authority has also taken steps to strengthen the integrity and finality of NBM's regulatory and supervisory decisions. Specifically, a legislative package was passed, in consultation with the IMF staff, as a preliminary action, that amended the NBM Act, the Banking Act, and the procedural codes to make a number of urgent improvements. In particular, the procedural codes were amended to ensure the effective enforcement of supervisory decisions aimed at eliminating unsuitable shareholders in order to eliminate the possibility that interim measures in court proceedings could prevent the implementation of supervisory measures applied to unsuitable shareholders, including those acting in concert (such as suspension or any other limitation of shareholder rights, cancellation of shares and sale of shares). In addition, to ensure fair compensation to shareholders for proven damages, the Banking Act was amended to introduce a system for determining the amount of damages for valid claims, which will be determined on the basis of the valuation of shares by a world-renowned accounting firm appointed by the relevant court in cases of bank liquidation, resolution of insolvency or decision to remove shareholders. In addition, in order to ensure adequate legal protection for the prudential supervisor commensurate with the NBM's public policy mandate, the NBM Law was amended to further clarify the liability standard for NBM officials and employees to enhance their legal protection against lawsuits, and detailed rules applicable to the legal review of prudential supervisory decisions, ensuring due respect for the administrative discretion and professional judgment of the NBM. "We are committed to further strengthening the institutional autonomy and governance of the NBM following consultations with the IMF. In this regard, we are committed to fully implement the recommendations on safeguards. In particular, we will strengthen provisions (structural benchmark as of the end of June 2022) such as: procedures and criteria for the appointment, resignation and dismissal of the President, Vice Presidents and members of the Oversight Board; prohibiting influence by public and private individuals; and clarifying the managerial responsibilities of the President and Executive Committee," the letter states. // 05.01.2022 - InfoMarket.
