Improving supervision of the banking system in the Republic of Moldova

Stronger economy
1,306,952 Euro
National Banks of Moldova in cooperation with the national banks of Netherland and Romania
2015 - 2017
In 2014-15 the financial sector of the Republic of Moldova underwent a crisis, as 1 billion EUR was stolen from the NBM, equivalent to approximately 15 % of the total Moldovan GDP. Following the scandal, the Twinning project was launched to raise the level of supervision of the Moldovan banking sector to the same standards as applied within the EU Member States (BASEL III) from their original point (BASEL I). The newly adopted BASEL III entails an increased requirement for the NBM to maintain a reserve of 6 % of their total liquidity compared with only 2.5 % under BASEL I. In addition, the level of transparency has been enhanced within the Moldovan banking sector.
Although the direct beneficiaries of the project are the NBM and banks of the Republic of Moldova, the final beneficiaries are all citizens of the Republic of Moldova, who will enjoy a viable, stable and sound banking system. The benefits from the project will become visible once the new legal framework is implemented, and the new risk-based supervision practices are applied. Furthermore, the establishment of a new legal framework, equivalent to that applicable in the EU Member States, will improve the image of the Moldovan banking system and help to attract new investor, thus stimulating economic growth in the country. Thanks to the project’s contribution, the Republic of Moldova is introducing as of January 2018, the new supervisory framework for the banks which is aligned to the current international standards (Basel III). The banking sector of Moldova is current working to implement the new regulations. The main results of the project have been achieved through training of employees, exchange of experience with foreign experts, conducting studies and other assessments. A new draft banking law – Law on banking activity – was developed and approved by the Parliament on the 17/1/2018. 20 secondary regulation drafts that ensure the approximation with the European normative framework related to banks were prepared. New internal rules have been drafted for the NBM, which will allow the efficient exercise of supervisory function. The organizational structure of the NBM Moldova has been changed. The level of knowledge of the supervisors of banks representatives on Basel III framework was increased through internal training, study cases, practical exercises performed in the Republic of Moldova, Romania and the Netherlands ect. More than 100 representatives from the Moldovan banking sector have received training.

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