Leonardo Badea (BNR): Perspectives for the development and consolidation of the financial system of the Republic of Moldova

On March 19, the closing event of the twinning project financed by the European Union “Consolidation of supervision, corporate governance and risk management in the financial sector” took place in Chisinau. The project was implemented by the National Bank of Romania (BNR) as project leader, the Central Bank of the Kingdom of the Netherlands (DNB) and the Bank of Lithuania (BL) – junior partners, the Financial Supervisory Authority (ASF), the National Authority for Consumer Protection (ANPC) and the Ministry of Investments and European Projects in Romania, with the aim of providing assistance for the implementation of the reforms assumed by the Association Agreement between the Republic of Moldova and the European Union, for the benefit of the National Bank of Moldova (BNM) and the National Market Commission Financial.

The twinning project is the second, both for the National Bank of Romania as the project leader – donor of technical assistance, and for the National Bank of Moldova, as the beneficiary.

According to Leonardo Badea, Deputy Governor of BNR present at the event, “the moment marks both the end of a stage and the beginning of a new perspective for the development and consolidation of the financial system of the Republic of Moldova”.

During the 30-month implementation period of the project, the Macroprudential Policy Strategy was developed, the stress testing framework was developed, the necessary regulations in the field of the insurance sector and for the infrastructure of payment systems were developed the methodologies and regulations necessary for the supervision of non-bank lending organizations and the accession file to the Single Euro Payments Area was prepared.

Thus, Vice Governor Leonardo Badea appreciated that “through this project, the National Bank of Moldova has travelled an impressive journey of transformation and reform” and noted the ability of the implementation teams to make significant progress in a relatively short time.

Likewise, the Vice-governor Leonardo Badea stated that “for Romania, this project came as a natural continuation of the effort carried out throughout these decades to support the European path, to modernize, open and develop the Republic of Moldova”.

During the implementation period of the twinning project, it is worth noting that significant historical milestones were recorded – the submission of the application for the accession of the Republic of Moldova to the European Union, its acceptance as a candidate state and the decision of the EU to open accession negotiations with the Republic of Moldova and Ukraine.

Regarding these stages, Vice-governor Leonardo Badea declared that they “represent the fundamental pillars of the European integration path of the Republic of Moldova and imposed the need for a proper preparation and alignment of the financial sector to European standards and requirements”.

Another significant process that took place during the implementation period of the project was the transfer of powers from the National Financial Market Commission to the NBM, through which the NBM became the main authority responsible for the supervision and regulation of the non-banking financial sector. Regarding this process, Mr. Vice Governor Leonardo Badea stated that “the joint efforts of the NBR and the NBM were directed to the preparation and support of the NBM in taking on these new responsibilities and powers”.

Likewise, the Vice-Governor Leonardo Badea appreciated the efforts of those involved, stating that “our project not only contributed to the realization of some reforms assumed by the Republic of Moldova through the Moldova-EU Association Agreement, but was also an eloquent example of a solid partnership and commitment demonstrated by the NBM in its efforts to achieve the necessary reforms for the accession of the Republic of Moldova to the EU”.

Strengthening the knowledge and competences of the NBM regarding regulation and prudential supervision, in accordance with the acquis communautaire and alignment with international best practices was a major objective achieved during the twinning project.

The activities carried out led to the submission in January 2024 of the application for the accession of the Republic of Moldova to the Single Euro Payments Area, which, according to Mr. Vice-Governor Leonardo Badea, “will result in a more competitive and transparent economy, a better quality of services , more efficient products and cheaper payment alternatives”.

Vice-governor Leonardo Badea reiterated the importance of concern for the sustainability of the results obtained, stating that “it is essential to ensure that the changes and improvements made within this project remain solid and sustainable over time. This implies not only the adoption and implementation of appropriate policies and regulations, but also the cultivation of an organizational culture oriented towards excellence and accountability”.

The project demonstrated, beyond the achievement of the assumed objectives, the close and efficient collaboration, strengthened by the exchange of good practices between experts. Thus, the project contributed to the realization of reforms assumed by the Republic of Moldova through the Moldova-EU Association Agreement and demonstrated the commitment of the NBM in its efforts for the accession of the Republic of Moldova to the EU.

In conclusion, Vice-Governor Leonardo Badea brought back to the discussion the importance of support for the NBM in its efforts to consolidate the financial sector and reaffirmed the close connection between the two national banks, declaring that “we are determined to remain solid partners and offer our expertise and support in the future , to help you overcome future challenges and exploit the opportunities that will arise”.