Press Releases 2016 - April

18.04.2016 - Spring meetings IMF – WB

12.04.2016 - Exhibition of documents of Montenegrin Bank 1906 – 1918

11.04.2016 - The Tenth Annual Awards of CBCG

08.04.2016 - Meeting of the Governor of the CBCG and the Executive Director of the Belgian-Dutch Constituency in the IMF

08.04.2016 - Opening of the exhibition of documents “Montenegrin Bank 1906-1918”

07.04.2016 - The 85th CBCG Council Meeting Held

06.04.2016 - Workshop for development of the national strategy for financial education

04.04.2016 - FSC: Financial system stable

01.04.2016 - Governor Dakić attends regional meeting of governors in Rovinj

CENTRAL BANK OF MONTENEGRO
Podgorica, 18 April 2016

Spring meetings IMF – WB

Delegation of the Central Bank of Montenegro led by the governor of Central Bank of Montenegro Milojica Dakić, participate in the spring session of the International Monetary Fund and the World Bank. During the session, the delegation met with senior representatives of the IMF and the World Bank: Min Zhu - Deputy Director of the IMF, Cyril Muller - World Bank Vice President for Europe and Central Asia, Ellen Goldstein - Director of the World Bank for Montenegro Tomasz Telma – the IFC Director for Europe, Vice President of the MIGA Karin Finkelston, Paul Thomsen - Director of the IMF for Europe, as well as other senior officials.

Possibilities for providing technical assistance to Montenegro in the area of payment system oversight were discussed at a meeting with Min Zhu, as well as creating a framework for the implementation of macro-prudential policy and standards for the implementation of Basel III. Both sides expressed satisfaction with the completion of the FSAP program and noted that its implementation will improve financial stability of Montenegro. 

At a meeting with Cyril Muller, Vice President of the World Bank, priorities of the new Partnership Framework of the World Bank with Montenegro for the period 2016 – 2020 were discussed. It was jointly agreed that the main directions of future cooperation should focus on: increasing the resistance of Montenegro to shocks, reducing unemployment and inactivity and the development of the private sector.

At the meeting with the director of IFC for Europe Tomasz Telma the areas of future cooperation in supporting private sector investment were highlighted, particularly sustainable tourism, infrastructure and projects of agribusiness that are related to tourism, as well as improving access to finance for micro, small and medium-sized enterprises. Telma informed the delegation of Montenegro that the IFC plans investments in Montenegro in the range of 40 to 80 million US dollars.

At the meeting with the Vice President of MIGA Karin Finkelston, possibilities of granting potential MIGA guarantees for funds of the Investment and Development Fund were discussed, aimed at improving access to finance for small and medium business.

At a meeting with Paul Thomsen - Director of the IMF for Europe, economic situation in Montenegro was discussed. Governor of Central Bank of Montenegro Milojica Dakić said that the banking system of Montenegro is liquid and solvent, and that NPLs halved in relation to the historical maximum and noted that they are no longer systematic, but individual problem.

CENTRAL BANK OF MONTENEGRO
Podgorica, 12 April 2016

Exhibition of documents of Montenegrin Bank 1906 – 1918

On the occasion of 11th of April, Day of the Central Bank of Montenegro, Money Museum hosted an exhibition of documents Montenegrin Bank 1906-1918. This day was also an opportunity to celebrate 110 years since Montenegrin Bank started to operate as well as 110 years since minting the first Montenegrin state money, which is permanently displayed in the Museum. 

“Thanks to partially preserved, but unorganised archives of the Montenegrin Bank and its subsidiaries, which are kept in the State Archives of Montenegro in Cetinje, Archives of the National Museum of Montenegro and the Central National Library, we have a mosaic composed of images of documents which illustrate the daily work of the Bank” said the CBCG’s Executive Director Radoica Luburić at the opening ceremony of the exhibition.

Due to the abundance of diverse and interesting archive materials depicting Bank’s work within several social systems, the exhibition will be organised in two exhibition segments. The first, which is currently on display at the Money Museum, includes the Bank's work in the period 1906-1918, while the second will be subsequently displayed and will refer to the period 1919-1946, when the Montenegrin Bank was liquidated by the Decision of the Ministry of Finance of the Socialist Federal Republic of Yugoslavia.

Everyone who is interested can visit the exhibition of documents Montenegrin Bank 1906-1918 every day from 9AM–3PM.

CENTRAL BANK OF MONTENEGRO
Podgorica, 11 April 2016

The Tenth Annual Awards of CBCG

On 11 April, on the occasion of the Day of the Central Bank of Montenegro, the CBCG organised the ceremony of presenting Annual awards of the Central Bank of Montenegro for 2016. The expert committee made up of prominent university professors and experts from the Central Bank decided to give awards for the best diploma thesis, master's thesis and two doctoral dissertations. The Executive Director of the Central Bank Radoica Luburić presented the awards.

The award for the best diploma thesis was awarded to Vukan Lakić for his paper "Analysis of Business Operations of an Investment Bank", defended at the Faculty of Economics, University of Montenegro.

The award for the best master's thesis was awarded to Nebojša Žugić for his paper "Possible benefits for the Montenegrin banking by implementing CRM strategy (customer relationship management) in internet banking", defended at the Faculty of Economics, Management Studies, University of Montenegro.

In the category for the best doctoral thesis, the Annual Award was equally shared by Julija Cerović for her paper "Econometric modeling of risks based on the extreme value theory with a multidimensional generalization: application to Montenegro," and Tamara Backović Vulić for the paper "Econometric research of capital market volatility of Montenegro". Both works were defended at the Faculty of Economics, University of Montenegro.

The CBCG’s annual award was established in 2007 with a view to stimulating the development of scientific thought and promotion of young professionals in Montenegro. It consists of a plaque and a cash amount of EUR 2,000 for the best diploma thesis, EUR 3,000 for the best master's thesis and 4,000 euros for the best doctoral thesis.

CENTRAL BANK OF MONTENEGRO
Podgorica, 8 April 2016

Meeting of the Governor of the CBCG and the Executive Director of the Belgian-Dutch Constituency in the IMF

The Governor of the Central Bank and the Governor of Montenegro in the International Monetary Fund Milojica Dakić and his associates met today with the Executive Director of the Belgian-Dutch Constituency in the IMF Menno Snel, who is on an official visit to Montenegro.

During the meeting, participants exchanged views on the conclusions from the IMF’s Article IV consultation with Montenegro - a regular IMF mission that, at least once a year, collects information in a member country on the current state of the economy, prospects and policies. They also discussed the Financial Sector Assessment Program, implemented by the experts of the Fund and the World Bank in Montenegro during the last year. Participants also talked about proposals for a possible technical assistance from the IMF to Montenegro which will be further discussed during the upcoming Spring Meetings of the IMF and World Bank in Washington from 15-17 April.

The Belgian-Dutch Constituency, managed by Mr Snel, stands in the Fund as an example of a European and international cooperation of open developed and emerging economies that have shown a strong interest in global stability. As a member of the IMF's Executive Board, which consists of 24 executive directors in charge of daily management of the Fund, Mr Snel represent the interests of Montenegro, the Netherlands, Armenia, Belgium, Bosnia and Herzegovina, Bulgaria, Croatian, Cyprus, Georgia, Israel, Luxembourg, FYR Macedonia, Moldova, Romania and Ukraine.

CENTRAL BANK OF MONTENEGRO
Podgorica, 8 April 2016

Opening of the exhibition of documents “Montenegrin Bank 1906-1918”

On the occasion of the Day of the Central Bank of Montenegro, on Monday, 11th April at 18:00h an exhibition of documents “Montenegrin Bank 1906-1918” will be opened in the Money Museum in Cetinje.

The authors of the exhibition are the employees of the CBCG’s Money Museum, and the exhibition will be opened by the CEO of the CBCG Mr. Radoica Luburić. 

CENTRAL BANK OF MONTENEGRO
Podgorica, 7 April 2016

The 85th CBCG Council Meeting Held

The CBCG Council met today for the 85th meeting chaired by the Governor Milojica Dakić.

The Council adopted the Central Bank of Montenegro Annual Report for 2015, Financial System Stability Report for 2015, and the Price Stability Report for 2015.

The Central Bank of Montenegro Annual Report for 2015 stated that the year was marked by satisfactory economic growth resulting from the intensification of almost all sectors of the economy. Preliminary Monstat data reveal that Montenegro's economy recorded a real growth rate of 3.2% in 2015. Annual growth was recorded in total industrial output, number of tourists, construction, forestry, trade and transport. In the previous year, the real sector liquidity moderately improved and international environment trends had no stable impact on Montenegro’s economy. Financial and banking sectors’ stability improved with an evident reduction of weaknesses referring to the area of banks’ credit risk. Increased investors’ interest was actualised through the opening of two banks and one microcredit institution. It was concluded that new challenges will stem from the fiscal area through deficit widening and public debt increase. These trends have marked the reporting year and confirmed that the post-crisis recovery of the economy is still in progress and that it calls for structural reform measures and changes in the growth model in the domestic environment in order to reinforce domestic economic capacities, boost competitiveness and foster growth potentials. 

It was rated that the activities the CBCG undertook in the previous year were aimed at safeguarding stability of the financial system by furthering and maintaining a healthy banking system and safe and efficient payment transactions. Accordingly, the CBCG’s key activities referred to preventive and supervisory activities, stabilisation and strengthening of the banking sector and encouraging healthy competition. In this reference, it is expected that the increased number of business entities in the banking sector will result in higher competitiveness and service quality, and lending under more favourable conditions. It was concluded that the regulatory activities of the CBCG were mainly determined by the position of Montenegro in the EU accession negotiation process. The Council found that CBCG’s activities were based on high standards of transparency and social responsibility. CBCG operated with a profit of 1.17 million euros.

The Financial System Stability Report for 2015 stated that the current risk level can be rated as moderate. It was underlined that the level of non-performing loans, which remains rather high despite the significant decline in the previous year, represents a vulnerability to the banking system. Financial result was negative on the system level, primarily due to the application of the Law on the Conversion of Swiss franc (Chf) -Denominated Loans Into euro (Eur)-Denominated Loans, which has had an extremely adverse effect on the operations of one bank. At the same time, in 2015, the banking system was highly liquid. In addition, the aggregate solvency ratio was significantly above the legally prescribed minimum. In this period, deposits, lending activity, and total assets and liabilities increased, while interest rates declined.

The Price Stability Report for 2015 stated that, following a negative inflation recorded in 2014, positive annual inflation rates were recorded in all the months of 2015. Annual inflation rate amounted to 1.4%, which is in line with the projections given in the Annual Price Stability Report for the previous year. In reference to the region, positive inflation rates were recorded in Serbia (1.5%) and Albania (2%), while they were negative in Macedonia (-0.3%), Croatia (-0.3%), Slovenia (-0.6%) and Bosnia and Herzegovina (-1.3%). A survey performed by the CBCG revealed that majority of banks and economic entities expected the annual inflation rate to range between 1% and 1.5% in 2016. CBCG’s expert assessment is that this range will be from 0.6% to 2.6%.

CENTRAL BANK OF MONTENEGRO
Podgorica, 6 April 2016

Workshop for development of the national strategy for financial education

The Central Bank of Montenegro, with the support of the Child and Youth Finance International, implemented a Workshop for drafting a national strategy for financial education, which started today in Podgorica. The workshop was opened by the Executive Director of the CBCG, Radoica Luburić. 
        
''The aim of this important initiative is to bring together policy makers from the region, as well as financial institutions and professionals dealing with financial education of children and youth. In addition to this, it is very important to introduce them to the current challenges and tasks in the area of developing a national strategy for financial education, as well as financial inclusion, employment and entrepreneurship'', said Luburić at the opening ceremony.

 
Topics to be discussed during this three day workshop are international experiences in the development and implementation of national strategies for financial education, financial education programmes for children, young people and society as a whole, priorities of educational programmes in the countries of the region, and the like.      

In addition to representatives of the Central Bank of Montenegro, the workshop is attended by the representatives of the Ministry of Finance, Ministry of Education, as well as about twenty representatives of central banks and financial institutions from the region.

FINANCIAL STABILITY COUNCIL
Podgorica, 4 April 2016

FSC: Financial system stable

The 30th meeting of the Financial Stability Council, attended by the Governor of the Central Bank of Montenegro, the Minister of Finance and the President of the Securities and Exchange Commission was held today.

At today's meeting, the members discussed the Financial Stability Council Report for 2015 and IMF FSAP Mission Staff Report with the action plan for the implementation of recommendations.

The Financial Stability Council Report provides an overview of the Council’s activities in 2015. Analysing and assessing the impact of potential risks from the macroeconomic environment and within the financial system on the financial stability in Montenegro the Council concluded that the system is stable and that the level of systemic risk is moderate. In addition, it was concluded that the pursuit of sustainable economic policy based on growth expansion and recovery of the economy is a prerequisite for reducing the pressures and vulnerabilities potentially arising from the fiscal sector.

It is necessary to encourage new investments and opening of the economic growth potential through an increase of current economic activities and competitiveness. The Council underlined that this would result in the rise in employment, more efficient use of capital, and reduction of risks and vulnerabilities in the system. Expansion of economic activity and widening the basis for economic growth would secure the servicing of current debt, private and public, and provide the basis for new growth. In short to medium term, the contribution to accomplishing these economic objectives can be achieved through accelerated implementation of planned and started projects in the priority economic sectors: tourism, energy industry, agriculture and industry. In addition, growth will be affected by investments in the public sector, which will have a favourable impact on all components of growth by affecting overall spending and employment. It is necessary to continue the current spending consolidation, focusing mainly on the expenditure side and efficient implementation of structural reforms in the fiscal sector, in order to affect this sector’s stability. Strengthening the real sector and efficiently reinforcing the economic growth sustainability will secure financial i.e. macroeconomic stability.

In the upcoming period, the key challenges in terms of system stability refer to providing the following two elements: political stability and high economic growth rate. Moreover, in the area of financial stability, preservation of fiscal stability, sustainability of this policy and public debt management represent the priorities for the upcoming period. In reference to the real sector, low degrees of competition and diversification and the consequential wide current account deficit and still prominent corporate sector’s illiquidity represent the main challenges. In consideration of the financial system, the key challenges are reflected in reducing the interest rates and maintaining the NPL downtrend.

The Council supported the activities on the implementation of recommendations derived from the FSAP 2015 Mission Staff Report for Montenegro and its findings. The key recommendations refer to five areas: financial system resilience, financial safety net, financial surveillance, non-performing assets workout and financial sector development agenda.

CENTRAL BANK OF MONTENEGRO
Podgorica, 1 April 2016

Governor Dakić attends regional meeting of governors in Rovinj

The governor of the Central Bank of Montenegro Milojica Dakić participates in the annual meeting of governors from the region, held in Rovinj in Croatia.

The annual meeting of central bank governors from the region gathers governors, representatives of commercial banks and the financial sector. It aims to improve cooperation of financial institutions, provide a chance to exchange experiences and discuss current challenges in relation to the key areas of financial stability.

The main topics of the meeting focused on measures against the global crisis of the financial sector, the use of funds of central banks to stimulate national growth, the impact of the FED and the ECB on the regional and national monetary policy, raising the business efficiency of commercial banks, and the like.

In addition to the governor of the Central Bank of Montenegro, the regional meeting in Rovinj is also attended by the governors of the central banks of Croatia, Bosnia and Herzegovina, Slovenia, and Macedonia.