CBCG Delegation Held Meetings at the IMF and the State Department
23/04/2022
As a part of the regular annual International Monetary Fund (IMF) and the World Bank (WB) Spring Meetings, the Central Bank of Montenegro (CBCG) representatives met with Bo Li, Deputy Managing Director at the IMF, Alfred Kammer, the Director of the IMF’s European Department, and Paul Hilbers, Executive Director of the Dutch-Belgian Constituency.
In a meeting with Mr Bo Li, Deputy Managing Director at the IMF, the CBCG Governor Radoje Žugić pointed out the external economic and financial stability challenges in Montenegro. He stated that the banking system proved extremely sound and resistant to shocks, as confirmed in numerous assessments by international institutions, such as the European Commission and the IMF. He also pointed out that the external asset quality review confirmed the banking system’s stability. The Governor also stated that most of the key banking indicators, such as deposits, loans, capital, and assets, reached their historical highs at the end of the previous year.
“In addition to the proven banking system’s stability, the CBCG takes preventive measures to further strengthen the banking system’s resilience. They have included the introduction of capital buffers, macroprudential measures to limit consumer credit, extend the repo credit line with the European Central Bank, establishing a resolution fund, etc.,” said Žugić. The CBCG has established a resolution fund to further strengthen financial stability, and the development of resolution plans for banks is underway. Also, a countercyclical capital buffer was introduced this year to prevent and mitigate systemic risks of a cyclical nature. This buffer requires additional capital from credit institutions in the intensive credit growth phase and releases capital in the cycle’s downward phase.
Mr Li emphasised the importance of the extremely high GDP growth recorded in the previous year. He also pointed out the risks posed by inadequate competitiveness through a high current account deficit. He also stressed the IMF’s readiness to provide assistance and support to Montenegro in further reforms. Governor Žugić thanked and pointed out the traditionally good cooperation of the CBCG with the IMF.
During the first day of his visit to Washington, Governor Žugić also met with the US Department of State senior representatives.