Naši standardi moraju biti strožiji od međunarodnih - Cb-mn.org

december 2010 | :Ba : Bankar
INTERVIEW WITH THE GOVERNOR OF THE CENTRAL BANK OF MONTENEGRO
MR. RADOJE ŽUGIĆ, M.Sc.
The work of the Financial Stability Council will largely contribute to the fi nancial stability maintenance.
I believe that we have all learned lessons from the crisis, including banks, so that we stand ready for
new challenges, including a potential credit growth. A much better situation is the one in which banks
increase their foreign borrowing instead of withdrawing deposits from the country and investing them
abroad. Montenegro does not need a credit arrangement with the IMF. All the analysis made by the
Central Bank so far indicate that a credit line arrangement to be used for funding the fi scal defi cit, if
required, to be concluded with the IMF or any other international fi nancial institution would be viable
and economically justifi able. There is room for an additional Eurobond issue in the following year to
be used primarily for the repayment of a part of the existing debt carrying unfavourable interest rate,
that is, higher than the one to be achieved with the sale of Eurobonds
:B Your mandate as the Governor of the CBM
has practically just begun. Still, could you share
your fi rst impressions of the institution you are now
heading? What do you see as the main challenges as
the Governor and could you tell us whether there have
already been any pressures?
In accordance with the constitutional provisions,
the Central Bank of Montenegro is governed by the
Council and managed by the Governor. Th e greatest
challenges for the Governor is to ensure a smooth
and ongoing attainment of the objectives and the
exercising of functions of the Central Bank, in particular
the following: fostering and maintaining the
fi nancial system stability, in particular fostering and
maintaining a sound banking system and safe and
effi cient payment system; contributing to the achievement
and maintenance of price stability and supporting
the achievement of economic policy of the
Government of Montenegro, acting thereby in line
with the principles of a free and open market and
the freedom of entrepreneurship and competition.
Th e Central Bank of Montenegro operates in the
euroised economy being a small and open market,
having no issuing function, and having a limited
number of monetary instruments at its disposal,
so our standards have to be stricter than international
ones. Th erefore, we must require a higher
level of discipline and higher standards. Monetary
policy and instruments within the authority of the
Central Bank could signifi cantly contribute to the
recovery from the fi nancial crisis, but not without
a joint eff ort with all other market participants. In
the current circumstances of curbed recession and
the announced (estimates) of economic growth, the
Central Bank has a somewhat changed role. It refl
ects in taking measures to provide for a controlled
lending activity revival and creating an environment
to allow for a reduction of interest rates. Th e interim
measures that have been recently passed by the
Council of the Central Bank have this aim.
Some banks are unsatisfi ed with the level of relaxation
and they display their discontent. We, however,
consider that the Central Bank’s action at this stage
is quite suffi cient. Th ese are temporary measures that
will be the subject to ongoing follow-up in order
to prevent any imbalances at the fi nancial market.
We cannot allow the existence of any imbalances
at the fi nancial market. In addition, we must actively
work on further banking consolidation, yet taking
account, by using available measures and instruments,
to control the volume of lending and lending
multiplication aft er the economic revival in order
to avoid another facing controversies of whether
the Central Bank has acted timely and properly to
curb and prevent a fi nancial crisis.
Besides the personal pressure concerning the accountability
for responsible performing of the entrusted
tasks and duties, there were no other pressures.
Th ere have been constructive exchanges of
opinions and arguments, of course, as will there be
many more in the future, but these are always with
a view to fi nding optimum solutions. Th erefore, the
entire accountability rests with the Governor and
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