Second day of the Regional Summit of Governors, Finance Ministers, and Tax Administration Directors in Budva

16/06/2018

Regional Summit of Governors, Finance Ministers and Tax Administration Directors, organized by the Belgrade’s weekly NIN, started in Budva yesterday. This year’s summit topic is “Region’s Financial and Monetary Stability Ten Years since the Crisis Outbreak”.

The panel of Governors was held today under the title "Monetary Policy and Stability of the Banking Systems of the Countries in the Region - One Decade after the Lehman Brothers Bankruptcy". On this panel, the governors and other representatives of the central banks in the region discussed, among other things, the impact of monetary policy of the FED and the ECB on the countries of the region, addressing the issue of non-performing loans as a prerequisite for increasing banks ‘credit activity, the stability of the banking system, possible external shocks, interest rates, as well as a number of other current monetary issues.

In his presentation, Governor Žugić pointed out that the primary responsibility of central banks is to preserve financial stability, but also to stimulate credit activity and strengthen the regulatory framework. In this respect, one of the key challenges for financial market regulators throughout the region is a change of regulation, that is, the implementation of the Basel III and harmonization with the EU directives. Governor Žugić emphasized that it is important to have a proactive approach in these processes, in anticipation of possible events and, accordingly, timely creation of a system that will provide resistance to potential shocks. In addition, he added that it is necessary to ensure the co-operation of monetary and fiscal policy makers, in order to "unlock" the growth potentials and accelerate convergence with the EU.

Panellists supported the opinion that the key role of central banks is to preserve financial stability, and to provide adequate support to economic growth, and agreed on the continuation of cooperation and the exchange of experiences towards achieving these goals.

One part of today's panel was dedicated to the inclusive growth driven by digital economies. Strategic Advisor Intellect Design Arena and University of Maryland (USA) Pradeep Kumar Kapur presented the experience of India that has established digital banking through the modernization of business operations and the use of latest technologies, and provided electronic and mobile services to a significant part of the population, who did not have or had difficult access to financial products.

Panellists agreed that the rapid development of digital innovations and block-chain technologies are bringing significant novelties that have the potential to completely change the current way of doing business, and that central banks must treat these trends with particular care.

The Summit in Bečići is held for the seventh year in a row and aims at developing dialogue and enhancing cooperation between the financial institutions of the region.