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Southeast Europe
May 17, 2019 www.intellinews.com I Page 15
VOX: Moldova's banking sector turns the corner
Ben Aris in Budapest
The following is extracts from a podcast with Corneliu Munteanu, the special advisor to the president of Moldova and head of strategic planning at the country's biggest bank, Moldova- Agroindbank (MAIB).
Following the shock of the $1bn stolen from the banking sector in 2014, the government has got its act together and is transforming the business, with some help from the European Bank for Reconstruction and Development (EBRD).
Corneliu Munteanu: Moldova has a new banking strategy. The last strategy finished in 2017 and the biggest bank in the country, MAIB, is preparing a new five years strategy at the behest of the EBRD, which bought a 42% stake in MAIB last year and is now the biggest shareholder in the bank.
We have banking fraud, but we need to divide it into two: the $1bn stolen [in 2014] and another $20bn in money laundering. This is the main bank fraud. Our banking sector participated in this
and we are not happy about it. The government is trying to recover some of the $1bn and the government reports on it every day, but to be honest they have not recovered much.
The EBRD came in to start a new era in the banking sector and they are in other big banks in the country, including the Société Générale local bank and Victoriabank, another of the biggest banks in the country. Now the EBRD is in some of the biggest banks in the sector it will make a difference.
Since the shock of a MDL41bn banking fraud, the Moldovan government has belatedly started to clean up the sector.
In 2017 Moldova started to introduce BASEL III. Before that the National Bank of Moldova didn't have a lot of instruments to stop or influence the market. Now since 2016 we have jumped from Basel I to III and it has a lot of new instruments so that it can intervene when it sees something it doesn't like.
I don't want to say if someone is guilty or not, but before the National Bank was not able to intervene in the sector. Now we have a lot of new legislation on banking which are already working and these gave the National Bank the tools it needed.
There is no possibility for a repeat of the massive bank fraud. But it will take some time [to clean up the sector] as these Commonwealth of Independent States (CIS) countries [that Moldova does business with] are still connected to bad money. But we have new institutions that follow each transaction and will stop or freeze any transaction that is questionable.
Russia is still a problem as we still have business with Russia. But we are changing. We suffered three embargos on trade with Russia since 2017 and one of them was a full embargo [banning
all trade between the two countries]. This was a shock to our exporters who were not ready to reorient to western markets. It took them more than two years to get ready for the European market.
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