2014年-世界发展银行全球_Moldova_Financial_Sector_Assessment_30页_1011kb

Moldova Financial Sector Assessment Summary (December 2014)

Core Content

The Financial Sector Assessment Program (FSAP) conducted by a joint IMF-World Bank mission in 2014 highlighted significant vulnerabilities and development challenges in Moldova's financial system. Despite some progress since the 2008 FSAP update, the banking sector faces serious risks to its stability due to issues such as credit concentration, opaque ownership structures, and regulatory weaknesses.

Main Findings

1. Financial System Structure

• The banking sector dominates the financial system, with 14 commercial banks (four foreign) holding assets equivalent to about 70% of GDP.
• A small number of individuals control the banking sector and the nonbank financial institutions, including insurance companies and securities registries.
• Cross-border financial linkages have increased dramatically, with foreign placements by Moldovan banks more than doubling to 11% of GDP since 2011.
• The capital market is small and illiquid, with the Moldova Stock Exchange representing less than 1% of GDP in turnover and 6.7% in market capitalization.
• The insurance sector is limited to motor insurance and is dominated by a few firms, with a weak competitive environment.

2. Financial Stability Risks

A. Legal System

• Constitutional Court rulings have constrained the supervisory powers of the National Commission for Financial Markets (NCFM) and the National Bank of Moldova (NBM).
• The NBM's ability to enforce decisions has been limited, and the NCFM has faced suspension of regulatory actions.
• Legislative amendments in December 2013 attempted to restore NBM's powers but are not yet fully implemented, and the process for parliamentary approval is uncertain.

B. Bank Governance

• Ownership structures are complex and opaque, with ultimate beneficial owners (UBOs) often concealed.
• Boards lack independence and are not well qualified to oversee operations.
• There is no clear separation of roles between owners, board members, and management, leading to blurred accountability and weak governance.
• Internal audit and compliance functions are under-resourced and ineffective, failing to ensure proper risk management and financial reporting integrity.

C. Asset Quality

• The sector-wide nonperforming loan (NPL) ratio is 11.6%, but individual banks, including systemically important ones, have NPL ratios exceeding 60%.
• Weak governance allows for significant connected lending, often to shell companies, increasing concentration risk.
• Collateral and provisioning practices are inconsistent, with underreporting of risks and potential misclassification of loans.
• FX-related risks are managed due to high remittances and foreign exchange reserves, but FX lending practices remain questionable and require closer monitoring.

D. Insurance Sector

• The insurance sector is small, with nonlife insurance dominating and life insurance being nascent.
• There is a lack of competition and a tendency toward anticompetitive practices.
• The sector is not yet ready for a risk-based supervision model due to resource constraints.

3. Stress Testing and Supervision

• Stress tests suggest bank balance sheets are resilient, but these may not reflect the true system-wide vulnerabilities.
• There are data gaps and hidden risks, particularly in cross-border and connected lending.
• Supervisory powers and enforcement mechanisms are weak, and regulatory actions are often delayed or suspended due to legal challenges.

Key Policy Recommendations

Key Vulnerabilities and Challenges

• Transparency and Governance: Weak ownership transparency, unclear roles, and lack of independent board members.
• Legal and Regulatory Weaknesses: Courts can suspend regulatory actions, and there is a need for clearer legal frameworks and judicial review procedures.
• Asset Quality and Risk Management: High NPLs, questionable loan classifications, and poor risk management practices.
• Crisis Management and Safety Nets: Limited capacity of the Deposit Guarantee Fund (DGF) and weak insolvency and restructuring mechanisms.
• Financial Market Infrastructure: Outdated systems and fragmented equity registration processes.
• Insurance Sector: Low competition, limited product diversity, and resource constraints for implementing modern supervision.

Conclusion

The mission emphasized the urgent need for reforms in governance, legal framework, and supervision to enhance financial stability and resilience. The recommendations focus on improving transparency, strengthening regulatory powers, and enhancing crisis management capabilities. While the government supports reform, the timeline for implementation remains uncertain.