A high-level dialogue with the European Central Bank held
18/09/2017
The Central Bank of Montenegro delegation, consisting of the Governor Mr Radoje Žugić, PhD, the Vice-Governor for Banking System Supervision, Ms Irena Radović, PhD and the Vice-Governor for Financial Stability and Payment System, Mr Nikola Fabris, PhD, attended the meeting dedicated to high-level dialogue with the European Central Bank in Frankfurt today. The ECB delegation was headed by Mr Benoît Cœuré, the Executive Board member.
Governor Žugić presented the current macroeconomic situation in Montenegro and the situation in the financial system to the ECB representatives.
"According to the CBCG estimates, the average GDP growth rate in the first half of 2017 was around 4%," the Governor said and expressed the expectation that such trend will continue until the year-end and the next year, which will be in line with projections of the CBCG. Concerning the banking sector, it is characterized by a strong consolidation, liquidity and solvency ratios above the prescribed level, and the improvement in the regulatory framework, towards its full harmonization with EU standards and best banking practice. The Governor pointed out that banks in Montenegro recorded growth in lending activities, with a continuous decrease in the share of non-performing loans and interest rates, which, according to the governor, are still a fairly expensive input for the real economy.
As the meeting continued, the CBCG Vice-Governors presented the latest information on trends and developments in the banking sector and supervision, as well as in the financial stability and real economy segment.
The ECB Executive Board member, Mr Coeuré appreciated the achieved results in Montenegro and supported the ongoing and planned CBCG activities aimed at further strengthening financial stability.
Members of the Montenegrin and the ECB delegations expressed their satisfaction with the current cooperation, which will be intensified in the upcoming period, along with the progress of Montenegro in the process of the EU accession. In this respect, the plans for signing a memorandum of cooperation between the CBM and the ECB, within the Single Supervisory Mechanism was also discussed at the meeting. Namely, the ECB took over the role of bank supervisor in the European Union since 2014, thus the memorandum is intended to specify the process of information exchange, which is important for more efficient supervision.
During the dialogue, the macroeconomic situation in the Euro area, the situation in the financial sector and the expectations for the next period were discussed.
High-level dialogue is regularly held between the European Central Bank and the central banks of the candidate countries for EU membership that started accession negotiations with the European Union and aims to prepare these countries for future membership in the European system of central banks.