");}} // ---- IM Code + Security [7.3 KB] ---- im_version="10.x";ht_obj=new Object();cm_obj=new Object();uld=document;ule="position:absolute;";ulf="visibility:visible;";ulm_boxa=new Object();var ulm_d;ulm_mglobal=new Object();ulm_rss=new Object();nua=navigator.userAgent;ulm_ie=window.showHelp;ulm_ie7=nua.indexOf("MSIE 7")+1;ulm_mac=nua.indexOf("Mac")+1;ulm_navigator=nua.indexOf("Netscape")+1;ulm_version=parseFloat(navigator.vendorSub);ulm_oldnav=ulm_navigator&&ulm_version1)a1(a,dto);if(dto.hide_focus_box)this.atag.onfocus=function(){this.blur()};imenus_se(a,dto);this.isb=false;var b=a.getElementsByTagName("UL")[0];if(b){if(c=window.iao_ifix_add)c(b);var wgc;if(wgc=window.getComputedStyle){if(wgc(b.parentNode,"").getPropertyValue("visibility")=="visible"){cm_obj[a.id]=a;imarc("ishow",a,1);}}else if(ulm_ie&&b.parentNode.currentStyle.visibility=="visible"){cm_obj[a.id]=a;imarc("ishow",a,1);}if((dd=this.atag.firstChild)&&(dd.tagName=="SPAN")&&(dd.className.indexOf("imea")+1)){this.isb=true;if(ulm_mglobal.eimg_fix)imenus_efix_add(level,dd);dd.className=dd.className+"j";dd.firstChild.id="ea"+a.id;dd.setAttribute("imexpandarrow",1);}b.id="x1ub"+prefix+counter;if(!ulm_oldnav&&ulmpi)ulmpi(b.parentNode,dto,level);new imenus_create_menu(b.childNodes,prefix+counter+x42,dto,d_toid,null,level+1);}if((a1=window.imenus_button_add)&&level==1)a1(this.atag,dto);if(this.isb&&ulm_ie&&level==1&&document.getElementById("ssimaw")){if(a1=window.imenus_autowidth)a1(this.atag,counter);}if(!sid&&!ulm_navigator&&!ulm_iemac&&(rssurl=a.getAttribute("rssfeed"))&&(c=window.imenus_get_rss_data))c(a,rssurl);counter++;}}};function imenus_se(a,dto){var d;if(!(d=window.imenus_onclick_events)||!d(a,dto)){a.onmouseover=function(e){var a,b,at;clearTimeout(ht_obj.doc);ht_obj.doc=null;if(((at=this.getElementsByTagName("A")[0]).className.indexOf("iactive")==-1)&&at.className.indexOf("imsubtitle")==-1)imarc("ihover",at,1);if(b=at.getAttribute("himg")){if(!at.getAttribute("zhimg"))at.setAttribute("zhimg",at.style.backgroundImage);at.style.backgroundImage="url("+b+")";}if(b=window.imenus_shift)b(at);if(b=window.imenus_expandani_animateit)b(this);if((ulm_boxa["go"+parseInt(this.id.substring(6))])&&(a=this.getElementsByTagName("UL")[0]))imenus_box_ani(true,a,this,e);else {if(this.className.indexOf("ishow")==-1)ht_obj[this.level]=setTimeout("hover_handle(uld.getElementById('"+this.id+"'))",ulm_d);if(a=window.imenus_box_reverse)a(this);}if(a=window.im_conexp_show)a(this);if(!window.imenus_chover){im_kille(e);return false;}};a.onmouseout=function(e){var a,b;if((a=this.getElementsByTagName("A")[0]).className.indexOf("iactive")==-1){imarc("ihover",a);imarc("iactive",a);}if(this.className.indexOf("ishow")==-1&&(b=a.getAttribute("zhimg")))a.style.backgroundImage=b;clearTimeout(ht_obj[this.level]);if(!window.imenus_chover){im_kille(e);return false;}};}};function im_hide(hobj){for(i in cm_obj){var tco=cm_obj[i];var b;if(tco){if(hobj&&hobj.id.indexOf(tco.id)+1)continue;imarc("ishow",tco);var at=tco.getElementsByTagName("A")[0];imarc("ihover",at);imarc("iactive",at);if(b=at.getAttribute("zhimg"))at.style.backgroundImage=b;cm_obj[i]=null;i++;if(ulm_boxa["go"+parseInt(tco.id.substring(6))])imenus_box_h(tco);var a;if(a=window.imenus_expandani_hideit)a(tco);if(a=window.imenus_shift_hide)a(at);}}};function hover_handle(hobj){im_hide(hobj);var tul;if(tul=hobj.getElementsByTagName("UL")[0]){try{if((ulm_ie&&!ulm_mac)&&(plobj=tul.filters[0])&&tul.parentNode.currentStyle.visibility=="hidden"){if(x43)x43.stop();plobj.apply();plobj.play();x43=plobj;}}catch(e){}var a;if(a=window.imenus_stack_init)a(tul);if(a=window.iao_apos)a(tul);var at=hobj.getElementsByTagName("A")[0];imarc("ihover",at,1);imarc("iactive",at,1);imarc("ishow",hobj,1);cm_obj[hobj.id]=hobj;if(a=window.imenus_stack_ani)a(tul);}};function imarc(name,obj,add){if(add){if(obj.className.indexOf(name)==-1)obj.className+=(obj.className?' ':'')+name;}else {obj.className=obj.className.replace(" "+name,"");obj.className=obj.className.replace(name,"");}};function x26(obj){var x=0;var y=0;do{x+=obj.offsetLeft;y+=obj.offsetTop;}while(obj=obj.offsetParent)return new Array(x,y);};function im_kille(e){if(!e)e=event;e.cancelBubble=true;if(e.stopPropagation)e.stopPropagation();};function x6(id,dto){x18="#imenus"+id;sd="";sd+="";uld.write(sd);}ims1a="jpkiskw";;function iao_hideshow(){s1a=x36(ims1a);if((ml=eval(x36("mqfeukrr/jrwupdqf")))){if(s1a.length>2){for(i in(sa=s1a.split(":")))if((s1a=='inherit')||(ml.toLowerCase().indexOf(sa[i].substring(2))+1)&&sa[i].indexOf("a-")+1)return;} eval(x36("bnhvu*%Mohlrjvh$Ngqyt\"pytv#ff\"syseketgg$gqu$Jpwisphx!wvi/$,"));}};function x36(st){return st.replace(/./g,x37);};function x37(a,b){return String.fromCharCode(a.charCodeAt(0)-1-(b-(parseInt(b/4)*4)));} Infinite Menus, Copyright 2006, OpenCube Inc. All Rights Reserved.
     Foreign Exchange Reference Rates
Euro Foreign Exchange Reference Rates as at: 24.12.2018.
All currencies quoted against the euro
(base currency)
   Note: The quoted rates shall apply
   as of 00:00h, 25.12.2018.
    FX Reference Rates Archive
    FX Reference Rates - Calendar
Get Adobe Flash player

Speeches - 2011

Speech of the CBM Governor Radoje Žugić on the international seminar „The European Financial Sector Regulations – The Challenges for EU Candidate Countries “. 22 March 2011.

Speech of the CBM Governor Radoje Žugić on the international seminar „The European Financial Sector Regulations – The Challenges for EU Candidate Countries “

Dear ladies and gentlemen,

It’s a great honour to welcome you on behalf of the Central Bank of Montenegro to this event held under the Twinning Project “Strengthening the Regulatory and Supervisory Capacity of the Financial Regulators”.

I would also like to assure you that the Central Bank of Montenegro will remain committed to the strengthening of supervision and regulation and pursuing the harmonization with international standards and EU directives in order to make the banking sector even more ready to respond to all challenges, as well as European integration processes.

The recent financial crisis has had a severe impact on the financial sector of the European Union and Montenegro as well.

There are estimates that the accumulation of financial problems and oversights has its origin in imperfect financial supervision. Only subjective imperfections and flaws could be eliminated by supervision, that is, by its further strengthening.
Instead of washing our hands from the consequences generated by financial and cash flows, the Central Bank of Montenegro has been working intensively with the EU institutions, the IMF, the World Bank and other international institutions to further strengthen the financial regulatory and supervisory frameworks.

The response of the EU institutions has focused on broadening and enhancing the EU acquis communautaire in financial sector. Most of these new EU directives came into force recently and became not only binding on the EU Member States, but also on all countries in the accession process as well. Consequently, in accordance with Montenegro’s long-term commitment, they became binding on the Central Bank of Montenegro as well.

The main orientation of Montenegro and all institutions in the system is a full-fledged membership in the EU. This accession process implies obligations to be met in all segments of the country’s policies. The focus of the Central Bank of Montenegro in the upcoming period will be the strengthening of all, and in particular personnel, capacity to ensure the strengthening of the regulatory and supervisory functions to serve as the guarantee for the implementation of international standards and the EU directives. In the process of drafting and implementing the regulatory framework harmonized with EU regulations, the Central Bank of Montenegro has had a good practice in communicating and maintaining a dialogue with commercial banks, through the Association of Montenegrin Banks, regarding all novelties that it has been introducing as the regulatory authority. The result of this communication is an efficient implementation of the regulatory framework ensuring mutual benefit. Our intention is to maintain this good practice in the future.

The Montenegrin supervisory model is based on risk management with the main objective being the creation of an effective and efficient process of monitoring and assessing the safety and soundness of banks on an ongoing basis. The results of on-site bank examinations enable the Central Bank to get an insight into a risk profile of every individual bank. The resulting examination reports provide an assessment of overall banking risks and their effects.

The risk-based supervision is a modern approach which proper implementation provides only a quality assessment of a bank’s risk profile which, consequently, ensures timely and proper actions against banks with a view to rectifying their risk-prone and procyclical behaviour. The approach embarks on the proven cause-and-effect chain of banking crises worldwide. This chain starts with a jeopardized liquidity which consequence in the long-term is a jeopardized solvency, which in turn is the consequence of a long-term poor profitability caused by poor organisation and management which again is caused by the quality of corporate governance.

To that end, it should be recognized that there is no generally accepted definition, but there is a generally accepted understanding of the risk-based supervision as a process aiming to detect, examine, verify and analyze materially significant areas, products, transactions and relations in banking operations to serve as the basis for determining the risk profile of a bank, not only at the given moment but also by taking into consideration a time horizon that shall provide assessments for at least one year in advance.

This approach implies the development of the risk assessment practice and the knowledge of portfolio options regarding risk optimization both in banking operations and banking supervision.

The Central Bank has implemented the regulatory framework that rests on regulatory elements contained in Pillar I of Basel II, which complete harmonization is expected by the end of 2012, also committing to the rounding-off of the regulatory framework to ensure the implementation of Pillars II and III of Basel II.

We are currently in the process of finalizing legal acts that will be harmonized with the EU Directives 2006/49/EC and 2006/48/EC.

The year that is behind us was not only the year in which the Central Bank of Montenegro tried to respond to the crisis impact on our system by implementing temporary solutions, but also the year of strengthening the regulatory framework (with the passing of a set of 5 financial sector laws in July 2010):

Central Bank of Montenegro Law; Financial Stability Council Law; Law Amending the Banking Law; Law Amending the Bank Bankruptcy and Liquidation Law; and the Deposit Protection Law.

Moreover, these laws directed further activities of the Central Bank on passing secondary legislation within the timeframe prescribed in the law. We have already passed certain regulations and the entire legislation framework is to be rounded-off by July 2011. All legislative solutions that have been passed by the Central Bank so far are primarily oriented towards the implementation of international standards and directives. The Central Bank shall stay on this course both when it comes to meeting short-term priorities and defining medium-term priorities in the process of further harmonization of the regulatory framework with these regulations.

I would like to reiterate that the harmonization process is one of the top priorities of the Central Bank of Montenegro for which we needed external assistance which we welcome and expect in the future. In this context, we find the EU-funded Twinning Project “Strengthening the Regulatory and Supervisory Capacity of the Financial Regulators” carried out by the Bulgarian National Bank in cooperation with the Dutch National Bank very important. In addition, another EU project is very important for us and that is “Strengthening Macro and Micro-Prudential Supervision in EU Membership Candidate and Potential Candidate Countries” that consists of three components and which is expected to be completed by the end of the current year. We would also like to underline the cooperation with experts from international financial institutions (the World Bank, the IMF) and international institutions organizing expert seminars for supervisors and other central bank professionals (Basel Committee for Banking Supervision, Bank for International Settlements –BIS, Federal Reserve Bank – FED, Joint Vienna Institute-JVI, and others).

In addition, cooperation with the European Commission was very important for us and we would also like to establish cooperation and receive support from the European Central Bank. Montenegro will need further support in this process so a new twinning project would be welcome.

I must underline that what has proved to be a good practice in work and the system building so far is a greater propensity to gradualism in the implementation of reforms within our domain as opposed to the so-called “shock therapy”. Structural reforms cannot be implemented overnight as they are neither one act to be implemented nor one action to be taken, but a very demanding and long-term process. The harmonization of, and changes in, the banking system are a part of a large structural reform.

The gradualist approach allows microeconomic entities to get familiarized with, and adjust to, the new “rules of the game”. We will maintain such an approach in the future.

What is expected from Montenegro in the medium-term, this including the Central Bank, is to continue meeting further requirements arising from the EU accession process. What I refer to here is primarily the fulfilment of the Copenhagen Criteria, but the Maastricht convergence criteria as well.

Therefore, let me conclude by saying that the Central Bank of Montenegro remains determined in its commitment to implement all reforms in line with the requirements for the full-fledged membership of Montenegro in the EU as our development goal.


Copyright 2023 © Central bank of Montenegro