Press Releases 2010 - December

28.12.2010 - CMB Council adopted the Financial Plan, the Governor’s Report and the Chief Economists` Quarterly Report

28.12.2010 - Donations to Child Home “Mladost” and PI “Komanski most”

27.12.2010 - Information on application of Basel III presented and two decisions adopted

23.12.2010 - The obligation of submitting statistics of private external debt and FDI

06.12.2010 - Central Bank of Montenegro donated EUR 30.000 as a support to endangered

02.12.2010 - Cooperation Formats between the Central Bank of Montenegro and the IDF

01.12.2010 - Radoica Luburić appointed as the Executive Director of the CBM

01.12.2010 - Announcement regarding 4th CBM Council meeting

CENTRAL BANK OF MONTENEGRO
Podgorica, 28.12.2010

CMB Council adopted the Financial Plan, the Governor’s Report and the Chief Economists` Quarterly Report

The sixth meeting of the new Council of the Central Bank of Montenegro (CBM) was held on 27 December 2010. It was chaired by the CBM Governor, Mr. Radoje Žugić, MSc.

The Financial Plan of the Central Bank of Montenegro for 2011 was adopted at the meeting. The Plan envisages 9.744 million € of total revenues, which is 0.4% less than the expected revenues in 2010. Expenditures are planned to the amount of 9.628 million € or 0.1% less than in the current year, whereas 0.146 million € are planned as current reserves which allocation is to be determined by the CBM Council.

The Council also adopted the Governor’s Report. The Report states that bank lending continues trending downward, yet deposits showed an uptrend in November. Total assets of banks are on a decrease, but if observed by individual banks, eight record an increase and three banks a decline in their assets. The Report presents detailed activities of every individual organisation unit, as well as the balance sheet and the profit and loss statement of the CBM in the first eleven months of 2010. In addition, the Report contains the most important conclusions from the meetings of the CBM and the IMF mission that visited Montenegro in November this year.

Pursuant to its powers granted under the Central Bank of Montenegro Law and the Banking Law, the CBM adopted the Decision on Detailed Requirements for Members of the Board of Directors in Banks. A candidate for the Board of Directors must have a recognized personal reputation, professional qualifications, capabilities and experience in managing a bank. The Decision prescribes detailed manners of establishing the fulfilment of the aforementioned requirements.

In addition, the Council adopted the Chief Economist’s 2010 3Q Report. The Report states that the Montenegrin economy exited the recession at the end of the third quarter of the current year. Growth was recorded in industry, forestry, tourism, certain transportation segments and trade, whereas construction is still in the crisis. It is estimated that period-on-period real GDP growth in the first nine months of the current year was some 2%. Inflation remains low, the balance of payments has partially improved (as the result of crisis adjustments, rather than improved competitiveness), while the capital market is still in the crisis. The banking system is stable and highly liquid, and what is also important is that the system was recapitalized to the amount of 73 million € in 2010. 

The Council also adopted the Decision on Labour Rights of the Banking Ombudsman, thus completing the regulatory framework necessary to ensure uninterrupted operations of the banking ombudsman.

CENTRAL BANK OF MONTENEGRO
Podgorica, 28.12.2010

Donations to Child Home “Mladost” and PI “Komanski most”

The Central Bank of Montenegro donated 5,000 € to “Mladost” Bijela Institution for Children without Parental Care and Special Institution for Children and Youth “Komanski most”. This is the way the Central Bank of Montenegro expresses its solidarity and offers help to those who need it most.

CENTRAL BANK OF MONTENEGRO
Podgorica, 27.12.2010

Information on application of Basel III presented and two decisions adopted

The Financial Stability Council held its second regular meeting. It was chaired by the CBM Governor, Mr. Radoje Žugić, and attended by the Council members Mr. Vladimir Kavarić, the President of the Insurance Supervision Agency, and Mr. Zoran Đikanović, the President of the Securities and Exchange Commission.

The minutes of the first constitutive meeting of the Financial Stability Council were adopted at the meeting. The Council also adopted the Decision on the collection and exchange of data and information of importance for the financial system stability and the Decision on giving consent to the list of persons responsible for the delivery of data and information to the Financial Stability Council.

The Council was introduced to the information regarding the Basel III timeline for the implementation of novelties which this international standard will bring to the banking system operations.

Basel III is a part of ongoing efforts of the Basel Committee on Banking Supervision (BCBS) to further enhance the regulatory framework with a view to improving both quantity and quality of capital in order to discourage excessive borrowing and risk-taking of the banking sector. An integral part of this capital reform represents the introduction of the new minimum liquidity standards for internationally active banks. The new rules concerning capital and liquidity, after their full implementation, should enable banks to be able to absorb any future disturbances in the global financial market without being extended any extraordinary state support, as well as to improve the risk management process. This will provide the vital contribution to a long-term financial stability.

In the end, it was concluded that some risks to the financial stability still remain, yet the overall risk level was assessed as being moderate.

CENTRAL BANK OF MONTENEGRO
Podgorica, 23.12.2010

The obligation of submitting statistics of private external debt and FDI

The statistics of private external debt and foreign direct investments are parts of the statistics compiled by the Central Bank of Montenegro (CBM). The statistics are maintained by combining data received from direct reporting by companies and banks. The obligation of submitting these data is regulated in the Law on Foreign Current and Capital Operations, the Central Bank of Montenegro Law and the secondary legislation passed by the CBM. Since a number of companies failed to meet their legal obligation after numerous appeals by the CBM, the CBM is compelled to initiate offence proceedings against these companies before competent courts. The list of companies which have been definitely established to have failed in meeting this legal obligation is published at the Central Bank of Montenegro’s website at the following address:
cb-cg.org/eng/index.php?mn1=statistics&mn2=international_economic_relations&mn3=private_external_debt_and_fdi

However, the list does not exclude the possibility that there are other companies that have not met this reporting obligation, but the CBM does not have any conclusive information at the moment. Offence proceedings shall be initiated against all companies who fail to meet the legal obligation until 30 December of the current year.

CENTRAL BANK OF MONTENEGRO
Podgorica, 06.12.2010

Central Bank of Montenegro donated EUR 30.000 as a support to endangered

Joining the solidarity action regarding unprecedented floods in many Montenegrin municipalities, the Central Bank of Montenegro donated EUR 30.000. Thereby, we have joined numerous entities in expressing solidarity to those people who need help the most.

CENTRAL BANK OF MONTENEGRO
Podgorica, 02.12.2010

Cooperation Formats between the Central Bank of Montenegro and the IDF

At the meeting held between the representatives of the Central Bank of Montenegro and the Investment-Development Fund of Montenegro, the Fund’s representatives, Mr. Dragan Lajović, President of the Managing Board and Mr. Predrag Poček, Executive Director, introduced the Governor of the Central Bank of Montenegro, Mr. Radoje Žugić, and his closest associates on the activities and the operations of the Fund. It was noted that, in the present work, the Fund was highly effective in development projects crediting in Montenegro, thus becoming an important entity at the financial market of Montenegro. In the coming short period, the Fund shall improve and expand its business activities by developing new products, whereby it was emphasised that the Central bank, with respect to its systemic role in maintaining safeness and soundness of the banking system, should be fully aware of all business indicators of the Fund, including the need of assessing the Fund’s total risk profile by the Central bank, taking into consideration the importance and influence of the Fund to the banking sector. To that wit, the representatives of the Fund and the Central Bank would make special Memorandum of Understanding which would define their rights and obligations stemming from the systemic position of these institutions, pursuant to legislation regulating the institutional position, organisation and operations of these institutions.

CENTRAL BANK OF MONTENEGRO
Podgorica, 01.12.2010

Radoica Luburić appointed as the Executive Director of the CBM

Mr. Radoica Luburić, a Master of Economics and a Master of History was appointed as the Executive Director of the Central Bank of Montenegro on 1 December 2010.

Mr. Luburić shall be responsible for tasks of cooperation with international institutions and organizations, the European Union and other international entities, human resources management, legal affairs,  public procurement, investments and services, security and protection, administrative operations; and public relations.

Following the principle of independence of the CBM and its employees in pursuing objectives and exercising functions under the law, and wanting to fully affirm the political neutrality of employees, Radoica Luburić resigned his membership in the Governing Board of the Democratic Party of Socialists, as well as the position of MP in the Parliament of Montenegro.

CENTRAL BANK OF MONTENEGRO
Podgorica, 01.12.2010

Announcement regarding 4th CBM Council meeting

The following documents were adopted at 4th CBM Council meeting that was held on 30 November 2010 and chaired by the CBM Governor, Radoje Žugić, M.Sc.: Central Bank of Montenegro Policy for 2011, Guidelines for implementation of the Central Bank of Montenegro Policy for 2011, Recommendations to the Government of Montenegro for economic policy in 2011 and Inflation Report for Q3 2010.

Activities of the CBM in attaining basic objectives and functions in 2001 are defined in the adopted Central Bank of Montenegro policy and Guidelines for its implementation. The main priority of the Central Bank of Montenegro in 2001 will be the maintenance of monetary and financial stability, particularly paying attention to the banking system stability. In that respect, CBM will continue to develop monetary instruments (including also new instruments) and take necessary measures, under its competence, to strengthen confidence in overall financial system. Improvement in corporate governance and risk management in banking system will be enhanced. The Central Bank will fully support Government of Montenegro in 2001 in implementing economic policy, particularly contributing to acceleration of economic growth and development to the extent that will not bring into question attaining of objectives and constitutional responsibilities of CBM. In addition, CBM will actively participate in EU accession process of Montenegro, and it will function at the principles of socially responsible organisation, which will actively participate in developments of modern society.

Guidelines for the implementation of policy for 2011 defined in more detail actions for its implementation.

The Council also adopted Recommendations for economic policy for 2011.  Recommendations are grouped in eleven areas, and are complement to the policy that CBM will carry out in the following year. These recommendations are aimed at continuing the reforms, creating encouraging business environment, contributing to accomplishment of the projected economic growth of at least 3%, reducing current account balance of payment misbalance and encouraging activities in all key sectors.

The Inflation Report for Q3 2010 stated that the inflation was extremely low and that will range from 0.6% to 1.5% in 2010. This report also stated that Montenegro entered positive growth rates at the end of the third quarter 2010. Results of regular survey of CBM indicated that majority of surveyed companies expect employment growth and new investments, which point out that the continuance GDP growth may also be expected in 2011.

In addition, the Council continued with the practice of ongoing monitoring of the banking system concerning all performance indicators particularly in large systemic banks. The Council will pay special attention in future period to the permanent assessment of the system, and it will intensify activities on comprehensive review of effects arising from the implementation of new regulatory framework in order to act in a timely and efficient manner and, if needed, take corrective measures for further stabilisation and full safety of the banking sector.