The National Committee on Financial Stability. Why and how to reform it
The National Committee on Financial Stability. Why and how to reform it

Author(s): Adrian Lupuşor, Ricardo Giucci
Subject(s): National Economy, Financial Markets
Published by: EXPERT-GRUP Centrul Analitic Independent
Summary/Abstract: In Moldova, the National Committee on Financial Stability (NCFS) was created in 2010. However, for many reasons, it proved to be inefficient in preventing and managing the current banking crisis. One main reason relates to its strong political flavour, since at least half of its members have strong political affiliations. Furthermore, the NCFS acted - de facto - as a law enforcement body rather than a communication platform, thus threatening the independence of the National Bank. On top, the body has an unclear mandate; many of its activities overlap with the responsibilities of member agencies. Finally, it acted more as a crisis managing institution, with limited focus on crisis prevention. All these features contradict international experience in setting similar committees. Therefore, there is a clear need for reforming the NCFS, taking into account the lessons learned in Moldova, as well as the experience in other countries.

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