2014年-世界发展银行全球_Moldova_Financial_Sector_Assessment_Program___Corporate_Governance_Review_of_the_Moldovan_Banking_Sector_36页_1mb

Corporate Governance Review of the Moldovan Banking Sector (Technical Note, September 2014)

Core Content

This document is a technical note prepared as part of the World Bank-IMF Financial Sector Assessment Program (FSAP) mission in Moldova during February and March 2014. It provides an in-depth analysis of the corporate governance framework in the Moldovan banking sector, focusing on governance structures, ownership, and the challenges faced by the National Bank of Moldova (NBM) in ensuring sound and transparent banking practices.

Main Findings

A. Market Setting, Risk Factors, and Governance Culture

• The Moldovan banking sector has experienced rapid growth since the transition to a market economy in 1991, but it is currently facing significant corporate governance challenges.
• The sector consists of 14 commercial banks, with total assets of approximately MDL 76 billion (USD 5.6 billion) at the end of 2013, representing 93% of the total financial sector assets.
• The non-banking financial sector is underdeveloped and includes insurance companies, microfinance institutions, and saving and credit associations.
• The financial sector as a whole constitutes about 73% of GDP.
• Ownership is highly concentrated, with 77% of the banking system controlled by a small number of individuals, many of whom are acting in concert and have stakes in other parts of the financial system.
• Competition is limited, and related-party transactions, including cross-border exposures, pose significant systemic risks.
• Since 2010, the sector has been affected by "raider attacks," which have led to opaque changes in ownership and have undermined financial stability.

B. Regulatory and Institutional Framework

• The corporate governance framework for banks is governed by the Joint Stock Company Law (JSCL) and the Law on Financial Institutions (LFI).
• These laws outline shareholders' rights, board structure, censor committee responsibilities, and related-party transaction regulations.
• Article 24 of the LFI imposes a fiduciary obligation on bank directors to prioritize the interests of the bank and its clients over their own pecuniary interests.
• Banks are required to be incorporated as Joint Stock Companies (JSC) and to register their securities on the Moldova Stock Exchange.
• There are no specific restrictions on local or foreign ownership, but acquisitions of more than 5% of shares must be reported and approved by the NBM.
• The NBM has limited powers to perform its supervisory role due to a 2013 Constitutional Court ruling that reduced its administrative authority.
• The NBM's attempts to address governance weaknesses, such as blocking shareholders acting in concert or restricting cross-border credit exposures, have been challenged and suspended.
• The judicial system is perceived as corrupt, with judges and bailiffs playing a key role in facilitating raider attacks.
• The National Commission of Financial Markets (NCFM) has not taken action to investigate or raise concerns about the opaque ownership changes and related-party transactions.

C. Structure and Ownership

• The banking sector is composed of 14 JSCs, with the majority being privately owned. Two banks have state participation: Banca de Economii (BEM) with 33.3% + 1 share and Eurocredit Bank with 21%.
• Three banks are owned by foreign entities: Mobias Banca (Societe Generale), Exim Bank (Grupo Veneto Banca), and Banca Comercială Română Chișinău S.A.
• Ownership structures are opaque, with many banks controlled by multiple shell companies, each holding less than 5% of voting shares.
• The NBM has the authority to assess the suitability of potential buyers of significant stakes, but UBOs often avoid this process to remain anonymous.
• Raider attacks have been used to expropriate minority shareholders through fraudulent debt enforcement procedures, often involving the judicial system and share registries.
• As a result, approximately 80% of the banking sector and 70% of the non-banking financial sector are controlled by two undisclosed individuals.

D. Board Function

• Boards lack independence and objectivity, and are not well-qualified to oversee financial institutions.
• Board members are often selected based on political or business affiliations rather than expertise.
• There are no independent directors, and boards have not conducted self-assessments of their performance.
• The role of the board is not clearly defined in law or regulation, and the responsibility for strategic planning, risk appetite, and performance monitoring is not well established.
• Audit committees do not exist; instead, the Censor Committee, appointed by the shareholders meeting, is often referred to as the audit committee, but it does not serve as an independent mechanism for oversight.

E. Risk Oversight

• Risk management and internal controls are underdeveloped, leading to a lack of strategic planning and insufficient attention to the control environment.
• Critical risk control and internal audit functions are not adequately developed.
• The board is more focused on policy reviews and credit activity monitoring rather than strategic oversight.

F. Internal Audit

• Internal audit functions are not well developed or integrated into the overall governance structure.
• There is a lack of accountability and transparency in the audit process.

G. External Audit

• External audit practices are not robust, and the role of auditors in ensuring transparency and accountability is limited.

H. Disclosure and Transparency

• Disclosure requirements are not well enforced, and few banks disclose their compliance with corporate governance codes.
• The national corporate governance code does not provide adequate guidance on independent directors, board member evaluation, or conflict of interest management.
• The inability to identify ultimate beneficial owners (UBOs) hampers the monitoring of related-party transactions.

Policy Recommendations

• Strengthen the legal and regulatory framework for corporate governance to ensure transparency and accountability.
• Enhance the powers of the NBM to effectively supervise and address governance weaknesses.
• Improve the independence and objectivity of board members and ensure the development of robust internal and external audit functions.
• Promote the adoption and implementation of a comprehensive corporate governance code aligned with international standards.
• Address the root causes of corruption in the judicial system and improve the rule of law to prevent illicit ownership changes and related-party transactions.

Key Information

• The review was conducted by Laura Ard and Jean Michel Lobet, with additional inputs from various stakeholders.
• The findings highlight the systemic risks posed by opaque ownership structures and weak governance practices.
• The lack of transparency in ownership and related-party transactions has undermined the stability and integrity of the banking sector.
• The NBM's regulatory powers have been significantly curtailed, limiting its ability to ensure sound governance and financial stability.

Annexes

• Annex 1: Details recent raider attacks on major Moldovan banks, highlighting the methods and implications of these attacks.
• Annex 2: Lists the Basel Committee's 14 Principles for Corporate Governance in banking institutions, which serve as a benchmark for the review.