Moldova Financial Sector Assessment Program : Corporate Governance Review of the Moldovan Banking Sector
The banking sector in Moldova is in the midst of structural changes with worrisome corporate governance issues at the core. Corporate governance is at the center of a stable and profitable banking sector which is essential to support economic growt...
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| Format: | Report |
| Language: | English en_US |
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Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/10/25218534/moldova-financial-sector-assessment-program http://hdl.handle.net/10986/22910 |
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okr-10986-22910 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
EXTERNAL AUDITORS CAPITAL MARKETS DEPOSIT REGULATORY FRAMEWORK OPERATIONAL RISK BORROWER ACCOUNTING CUSTOMER DEPOSITS LIQUIDATION MONEY LAUNDERING EXPOSURES FINANCIAL SECTORS CONFLICT OF INTEREST FLOW OF FUNDS BANKING INDUSTRY BANK OFFICE INTEREST LAWS GOVERNANCE PRACTICE INDUSTRY INTEREST RATE PROPERTY RIGHTS EXCHANGE BANKING SYSTEM STRATEGIES LIQUIDITY SERVICES DISCLOSURE REQUIREMENTS PORTFOLIO CREDIT RISK MANAGEMENT REGULATOR CREDIT EXPOSURES CONNECTED LENDING BORROWERS ACCRUALS TAX SAVING PRIVATE PENSION PENSION AUDITS MARKET PARTICIPANTS JURISDICTIONS DEPOSIT RATES INTERNATIONAL FINANCE PUBLIC POLICY SAVINGS LOCAL BANKS CONFLICT OF INTERESTS FINANCIAL INSTITUTION CLIENT COUNTRIES OWNERSHIP STRUCTURES ECONOMIC CRISES COMMERCIAL BANK DEBTS PRODUCTIVITY CREDIT RISKS TRANSFERS CRITERIA DOMESTIC BANKS FINANCIAL INSTITUTIONS MARKETS DEBT FINANCIAL CRISES LEGISLATION CORPORATE GOVERNANCE FRAMEWORK PRIVATE SECTOR DEVELOPMENT MANAGEMENT OVERSIGHT SHAREHOLDERS’ RIGHTS LOANS ENTERPRISES GROSS DOMESTIC PRODUCT PENSION FUNDS FINANCIAL SYSTEM LEGAL FRAMEWORK FINANCE INTEREST RATE RISKS INFRASTRUCTURE BANKING SECTOR BANKS JUDICIAL SYSTEM RATING AGENCIES MARKET ECONOMY EMERGING MARKETS OPERATIONAL RISKS EQUITY INVESTORS FOREIGN NATIONALS DEPOSITORY SYSTEMIC RISK ACCOUNTABILITY BAD DEBTS BANK OPERATIONS WAGES INTERNATIONAL BANKING OWNERSHIP STRUCTURE AUDITORS TRANSPARENCY FINANCIAL STABILITY MARKET CONDITIONS CREDIT CONTROL CORPORATE GOVERNANCE REFORMS VALUE BANK CREDIT CONFLICTS OF INTEREST GOVERNANCE PRACTICES FINANCIAL PERFORMANCE INTERNAL CONTROLS PROPERTY FOREIGN BANKS SHARES SUPERVISORY AGENCIES RAPID EXPANSION REGULATORY BODIES FOREIGN EXCHANGE MINORITY SHAREHOLDERS SMALL COUNTRY SECURITIES SUBSIDIARY ASSET GROWTH BANK ACCOUNTS RISK FACTORS PROFITABILITY CREDIT RISK GOVERNANCE SHAREHOLDERS ENFORCEMENT INSURANCE MICROFINANCE INCENTIVE STRUCTURES THE NATIONAL BANK OF MOLDOVA INTERESTS FINANCIAL MARKET STOCK EXCHANGE NATIONAL BANK INVESTMENT RISK COMMERCIAL BANKS SHARE OVERSIGHT PROCESSES AFFILIATE NONBANK FINANCIAL INSTITUTIONS COLLATERAL BALANCE SHEETS CREDIT QUALITY FINANCE CORPORATION FINANCIAL MARKETS INTERNAL CONTROL ACCOUNTING PROCEDURES BANK CUSTOMERS RISK TAKING BANKING REGULATORS REVENUE INVESTMENTS RISK MANAGEMENT LENDING COMMUNICATION SHAREHOLDER ACTIONS SHAREHOLDER AUDIT BANKING SUPERVISION CUSTOMERS STRONG GOVERNANCE FINANCIAL SECTOR LIQUID ASSETS AUDITING CONSOLIDATION CORPORATE GOVERNANCE COMPETITION |
| spellingShingle |
EXTERNAL AUDITORS CAPITAL MARKETS DEPOSIT REGULATORY FRAMEWORK OPERATIONAL RISK BORROWER ACCOUNTING CUSTOMER DEPOSITS LIQUIDATION MONEY LAUNDERING EXPOSURES FINANCIAL SECTORS CONFLICT OF INTEREST FLOW OF FUNDS BANKING INDUSTRY BANK OFFICE INTEREST LAWS GOVERNANCE PRACTICE INDUSTRY INTEREST RATE PROPERTY RIGHTS EXCHANGE BANKING SYSTEM STRATEGIES LIQUIDITY SERVICES DISCLOSURE REQUIREMENTS PORTFOLIO CREDIT RISK MANAGEMENT REGULATOR CREDIT EXPOSURES CONNECTED LENDING BORROWERS ACCRUALS TAX SAVING PRIVATE PENSION PENSION AUDITS MARKET PARTICIPANTS JURISDICTIONS DEPOSIT RATES INTERNATIONAL FINANCE PUBLIC POLICY SAVINGS LOCAL BANKS CONFLICT OF INTERESTS FINANCIAL INSTITUTION CLIENT COUNTRIES OWNERSHIP STRUCTURES ECONOMIC CRISES COMMERCIAL BANK DEBTS PRODUCTIVITY CREDIT RISKS TRANSFERS CRITERIA DOMESTIC BANKS FINANCIAL INSTITUTIONS MARKETS DEBT FINANCIAL CRISES LEGISLATION CORPORATE GOVERNANCE FRAMEWORK PRIVATE SECTOR DEVELOPMENT MANAGEMENT OVERSIGHT SHAREHOLDERS’ RIGHTS LOANS ENTERPRISES GROSS DOMESTIC PRODUCT PENSION FUNDS FINANCIAL SYSTEM LEGAL FRAMEWORK FINANCE INTEREST RATE RISKS INFRASTRUCTURE BANKING SECTOR BANKS JUDICIAL SYSTEM RATING AGENCIES MARKET ECONOMY EMERGING MARKETS OPERATIONAL RISKS EQUITY INVESTORS FOREIGN NATIONALS DEPOSITORY SYSTEMIC RISK ACCOUNTABILITY BAD DEBTS BANK OPERATIONS WAGES INTERNATIONAL BANKING OWNERSHIP STRUCTURE AUDITORS TRANSPARENCY FINANCIAL STABILITY MARKET CONDITIONS CREDIT CONTROL CORPORATE GOVERNANCE REFORMS VALUE BANK CREDIT CONFLICTS OF INTEREST GOVERNANCE PRACTICES FINANCIAL PERFORMANCE INTERNAL CONTROLS PROPERTY FOREIGN BANKS SHARES SUPERVISORY AGENCIES RAPID EXPANSION REGULATORY BODIES FOREIGN EXCHANGE MINORITY SHAREHOLDERS SMALL COUNTRY SECURITIES SUBSIDIARY ASSET GROWTH BANK ACCOUNTS RISK FACTORS PROFITABILITY CREDIT RISK GOVERNANCE SHAREHOLDERS ENFORCEMENT INSURANCE MICROFINANCE INCENTIVE STRUCTURES THE NATIONAL BANK OF MOLDOVA INTERESTS FINANCIAL MARKET STOCK EXCHANGE NATIONAL BANK INVESTMENT RISK COMMERCIAL BANKS SHARE OVERSIGHT PROCESSES AFFILIATE NONBANK FINANCIAL INSTITUTIONS COLLATERAL BALANCE SHEETS CREDIT QUALITY FINANCE CORPORATION FINANCIAL MARKETS INTERNAL CONTROL ACCOUNTING PROCEDURES BANK CUSTOMERS RISK TAKING BANKING REGULATORS REVENUE INVESTMENTS RISK MANAGEMENT LENDING COMMUNICATION SHAREHOLDER ACTIONS SHAREHOLDER AUDIT BANKING SUPERVISION CUSTOMERS STRONG GOVERNANCE FINANCIAL SECTOR LIQUID ASSETS AUDITING CONSOLIDATION CORPORATE GOVERNANCE COMPETITION World Bank Moldova Financial Sector Assessment Program : Corporate Governance Review of the Moldovan Banking Sector |
| geographic_facet |
Europe and Central Asia Moldova |
| description |
The banking sector in Moldova is in the
midst of structural changes with worrisome corporate
governance issues at the core. Corporate governance is at
the center of a stable and profitable banking sector which
is essential to support economic growth and productivity.
However, the banking system in Moldova suffers from critical
governance weaknesses which the National Bank of Moldova
(NBM) has been unable to effectively address. The illicit
schemes used to gain control of the majority of the banking
sector’s assets have involved raider attacks by unidentified
individuals whose subsequent, de facto, related party
transactions have caused the deterioration of bank balance
sheets. The recent changes in controlling ownership have
resulted in nontransparent appointments of board members and
Chief Executive Officers (CEOs). This has led to substantial
blurring of the roles and responsibilities of ownership,
oversight (board), and management, resulting in no clear
accountability. The legal and institutional corporate
governance framework in Moldova is weak. Sound corporate
governance is first and foremost dependent upon the
motivations of owners and the resultant business culture
they instill through their selection and appointment of
board members. In Moldova, a few actors control the majority
of the banking system. They demonstrate dubious motives by
acting obscurely through others and through companies to own
and control important banks. These actions create a system
that is held captive to serve the needs and pleasures of a
few at the expense of many: the depositors, general public,
and ultimately, the taxpayer. |
| format |
Report |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Moldova Financial Sector Assessment Program : Corporate Governance Review of the Moldovan Banking Sector |
| title_short |
Moldova Financial Sector Assessment Program : Corporate Governance Review of the Moldovan Banking Sector |
| title_full |
Moldova Financial Sector Assessment Program : Corporate Governance Review of the Moldovan Banking Sector |
| title_fullStr |
Moldova Financial Sector Assessment Program : Corporate Governance Review of the Moldovan Banking Sector |
| title_full_unstemmed |
Moldova Financial Sector Assessment Program : Corporate Governance Review of the Moldovan Banking Sector |
| title_sort |
moldova financial sector assessment program : corporate governance review of the moldovan banking sector |
| publisher |
Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/10/25218534/moldova-financial-sector-assessment-program http://hdl.handle.net/10986/22910 |
| _version_ |
1764452395817893888 |
| spelling |
okr-10986-229102021-04-23T14:04:11Z Moldova Financial Sector Assessment Program : Corporate Governance Review of the Moldovan Banking Sector World Bank EXTERNAL AUDITORS CAPITAL MARKETS DEPOSIT REGULATORY FRAMEWORK OPERATIONAL RISK BORROWER ACCOUNTING CUSTOMER DEPOSITS LIQUIDATION MONEY LAUNDERING EXPOSURES FINANCIAL SECTORS CONFLICT OF INTEREST FLOW OF FUNDS BANKING INDUSTRY BANK OFFICE INTEREST LAWS GOVERNANCE PRACTICE INDUSTRY INTEREST RATE PROPERTY RIGHTS EXCHANGE BANKING SYSTEM STRATEGIES LIQUIDITY SERVICES DISCLOSURE REQUIREMENTS PORTFOLIO CREDIT RISK MANAGEMENT REGULATOR CREDIT EXPOSURES CONNECTED LENDING BORROWERS ACCRUALS TAX SAVING PRIVATE PENSION PENSION AUDITS MARKET PARTICIPANTS JURISDICTIONS DEPOSIT RATES INTERNATIONAL FINANCE PUBLIC POLICY SAVINGS LOCAL BANKS CONFLICT OF INTERESTS FINANCIAL INSTITUTION CLIENT COUNTRIES OWNERSHIP STRUCTURES ECONOMIC CRISES COMMERCIAL BANK DEBTS PRODUCTIVITY CREDIT RISKS TRANSFERS CRITERIA DOMESTIC BANKS FINANCIAL INSTITUTIONS MARKETS DEBT FINANCIAL CRISES LEGISLATION CORPORATE GOVERNANCE FRAMEWORK PRIVATE SECTOR DEVELOPMENT MANAGEMENT OVERSIGHT SHAREHOLDERS’ RIGHTS LOANS ENTERPRISES GROSS DOMESTIC PRODUCT PENSION FUNDS FINANCIAL SYSTEM LEGAL FRAMEWORK FINANCE INTEREST RATE RISKS INFRASTRUCTURE BANKING SECTOR BANKS JUDICIAL SYSTEM RATING AGENCIES MARKET ECONOMY EMERGING MARKETS OPERATIONAL RISKS EQUITY INVESTORS FOREIGN NATIONALS DEPOSITORY SYSTEMIC RISK ACCOUNTABILITY BAD DEBTS BANK OPERATIONS WAGES INTERNATIONAL BANKING OWNERSHIP STRUCTURE AUDITORS TRANSPARENCY FINANCIAL STABILITY MARKET CONDITIONS CREDIT CONTROL CORPORATE GOVERNANCE REFORMS VALUE BANK CREDIT CONFLICTS OF INTEREST GOVERNANCE PRACTICES FINANCIAL PERFORMANCE INTERNAL CONTROLS PROPERTY FOREIGN BANKS SHARES SUPERVISORY AGENCIES RAPID EXPANSION REGULATORY BODIES FOREIGN EXCHANGE MINORITY SHAREHOLDERS SMALL COUNTRY SECURITIES SUBSIDIARY ASSET GROWTH BANK ACCOUNTS RISK FACTORS PROFITABILITY CREDIT RISK GOVERNANCE SHAREHOLDERS ENFORCEMENT INSURANCE MICROFINANCE INCENTIVE STRUCTURES THE NATIONAL BANK OF MOLDOVA INTERESTS FINANCIAL MARKET STOCK EXCHANGE NATIONAL BANK INVESTMENT RISK COMMERCIAL BANKS SHARE OVERSIGHT PROCESSES AFFILIATE NONBANK FINANCIAL INSTITUTIONS COLLATERAL BALANCE SHEETS CREDIT QUALITY FINANCE CORPORATION FINANCIAL MARKETS INTERNAL CONTROL ACCOUNTING PROCEDURES BANK CUSTOMERS RISK TAKING BANKING REGULATORS REVENUE INVESTMENTS RISK MANAGEMENT LENDING COMMUNICATION SHAREHOLDER ACTIONS SHAREHOLDER AUDIT BANKING SUPERVISION CUSTOMERS STRONG GOVERNANCE FINANCIAL SECTOR LIQUID ASSETS AUDITING CONSOLIDATION CORPORATE GOVERNANCE COMPETITION The banking sector in Moldova is in the midst of structural changes with worrisome corporate governance issues at the core. Corporate governance is at the center of a stable and profitable banking sector which is essential to support economic growth and productivity. However, the banking system in Moldova suffers from critical governance weaknesses which the National Bank of Moldova (NBM) has been unable to effectively address. The illicit schemes used to gain control of the majority of the banking sector’s assets have involved raider attacks by unidentified individuals whose subsequent, de facto, related party transactions have caused the deterioration of bank balance sheets. The recent changes in controlling ownership have resulted in nontransparent appointments of board members and Chief Executive Officers (CEOs). This has led to substantial blurring of the roles and responsibilities of ownership, oversight (board), and management, resulting in no clear accountability. The legal and institutional corporate governance framework in Moldova is weak. Sound corporate governance is first and foremost dependent upon the motivations of owners and the resultant business culture they instill through their selection and appointment of board members. In Moldova, a few actors control the majority of the banking system. They demonstrate dubious motives by acting obscurely through others and through companies to own and control important banks. These actions create a system that is held captive to serve the needs and pleasures of a few at the expense of many: the depositors, general public, and ultimately, the taxpayer. 2015-11-06T16:34:34Z 2015-11-06T16:34:34Z 2014-09 Report http://documents.worldbank.org/curated/en/2015/10/25218534/moldova-financial-sector-assessment-program http://hdl.handle.net/10986/22910 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC Economic & Sector Work :: Financial Sector Assessment Program Economic & Sector Work Europe and Central Asia Moldova |