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National Bank of Moldova

The National Bank of Moldova (Romanian: Banca Naţională a Moldovei) is the central bank of the Republic of Moldova.[2]

National Bank of Moldova
Banca Națională a Moldovei
Headquarters in Chișinău
Headquarters in Chișinău
Headquarters1 Grigore Vieru Boulevard, Chişinău
Established4 June 1991
Ownership100% state ownership[1]
GovernorAnca Dragu
Central bank ofRepublic of Moldova
CurrencyMoldovan leu
MDL (ISO 4217)
Reserves1 740 million USD[1]
Websitewww.bnm.md

The National Bank of Moldova is an autonomous public legal entity and is responsible to the Parliament of the Republic of Moldova.[3] The primary objective of the National Bank of Moldova shall be to ensure and maintain the price stability. Without prejudice to its primary objective, the National Bank of Moldova shall promote and maintain a financial system based on market principles and shall support the general economic policy of the state.[4]

The National Bank cooperates with the Government with the view to achieving its objectives and, according to the Law, undertakes the necessary measures to implement such cooperation. The NBM periodically informs the public about macroeconomic analysis, financial market evolution and statistic data, including on money supply, credit granting, balance of payments and foreign exchange market.

Regulatory Bank

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See also: List of banks in Moldova

As the central bank of Moldova, the bank is the primary regulator in the industry, with the authority to issue and withdraw banking licenses and regulate and supervise the banking sector.[5]

Assistance from the IMF and various changes to banking in Moldova resulted in major improvements in the sector. The IMF reported in 2023 that Banks remain adequately capitalised, maintain adequate liquidity coverage and healthy asset quality.[6]

The National Bank of Moldova as the central bank, also controls interest rates and the exchange rate of the Moldovan leu.

Laws passed by the parliament are supplemented by secondary legislation consisting of regulations and decisions issued by the National Bank of Moldova.[5]

History

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Following the passing of legislation in 1991, a two-level banking system was formed with the National Bank of Moldova acting as the central bank and being banned from commercial banking activities. Leonid Talmaci was appointed Governor, he would hold office for 18 years and oversee the 1995 banking legislation that would cover the central bank and banking institutions.[7]

Following the collapse of the Soviet Union and the Moldovan Declaration of Independence in 1991, January 1992 saw Moldova began a market economy, however the freeing of price restraints resulted in rapid inflation and for a number of years the economy was in crisis. The country joined the IMF on 12 August 1992 and on 29 November 1993 a new currency was introduced, the Moldovan leu.

2001 saw an improvement in the economy with steady annual growth for a number of years.

As a result of a deliberate act, shortly before the 2014 Moldovan parliamentary election, a bank fraud took place involving three banks. Over a three day period, funds worth $1 billion were transferred to United Kingdom and Hong Kong shell companies used to conceal the real owners of assets,[8][9] then deposited into Latvian bank accounts under the names of various foreigners. An independent investigation appointed by the National Bank of Moldova concluded the three banks transferred at least 13.5 billion lei to five Moldovan companies affiliated with the Shor group, controlled by Ilan Shor. The fraud nearly bankrupted Moldova.[10] On 13 April 2023, a court sentenced Shor to 15 in years in prison in absentia on graft charges and froze all his assets.[11]

In December 2023 the Governor, Octavian Armașu, having been criticised in Parliament for failing to recover stolen financial assets and retaining in office bank employees who were accused in the banking fraud case, was dismissed.[12]

Governors

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№ Name Photo Term of office
Start of term End of term
1 Leonid Talmaci 4 June 1991 26 September 2009
2 Dorin Drăguțanu   6 November 2009 11 April 2016[13]
3 Sergiu Cioclea   11 April 2016[14] 30 November 2018
4 Octavian Armașu   30 November 2018 21 December 2023
5 Anca Dragu   22 December 2023[15] incumbent

See also

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References

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  1. ^ a b Weidner, Jan (2017). "The Organisation and Structure of Central Banks" (PDF). Katalog der Deutschen Nationalbibliothek.
  2. ^ Article 1 paragraph (1) of the Law of the Republic of Moldova on the National Bank of Moldova No. 548 of 21 July 1995
  3. ^ Article 1 paragraph (2) of the Law of the Republic of Moldova on the National Bank of Moldova No. 548 of 21 July 1995
  4. ^ Article 4 of the Law of the Republic of Moldova on the National Bank of Moldova No. 548 of 21 July 1995
  5. ^ a b "Banking & Finance in Moldova". 5 June 2023.
  6. ^ "Republic of Moldova: Second Reviews Under the Extended Credit Facility and Extended Fund Facility Arrangements, and Request for Waiver of Applicability for Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Republic of Moldova". 12 January 2023.
  7. ^ "Information regarding NBM". Retrieved 23 December 2023.
  8. ^ The great Moldovan bank robbery, BBC News (18 June 2015)
  9. ^ The billion-dollar ex-council flat, BBC News (7 October 2015)
  10. ^ "Banking: Is Moldova unreformable". 10 December 2019.
  11. ^ Service, RFE/RL's Moldovan. "Moldovan Court Increases Fugitive Shor's Prison Sentence To 15 Years". Radiofreeeurope/Radioliberty.
  12. ^ "Romania's former finance minister Anca Dragu nominated for governor of Moldova's central bank". 22 December 2023.
  13. ^ Dorin Drăguţanu, guvernator al BNM Archived 2014-12-26 at the Wayback Machine besøkt 30. november 2011. (Oversatt artikkel, Google Translate)
  14. ^ "Restoring trust in Moldova's banking sector". 14 February 2019.
  15. ^ "POLITICĂ Armașu, înlocuit la BNM de o fostă ministră de Finanțe din România. Cine este Anca Dragu" (in Romanian). newsmaker.md. 22 December 2023. Retrieved 22 December 2023.
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