{
  "title": "Montenegro: Financial Sector Assessment Program-Framework for NonPerforming Loans Workout and Insolvency and Creditor Rights-Technical Note",
  "publication": "IMF Staff Country Reports, June 28, 2016",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2016/12/31/montenegro-financial-sector-assessment-program-framework-for-nonperforming-loans-workout-and-44025",
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  "summary": "This paper examines the current state of nonperforming loans (NPLs) in Montenegro, assesses the regulatory and supervisory framework as well as the insolvency and creditor rights regime, and makes recommendations for strengthening the framework.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Examines the current state of nonperforming loans (NPLs) in Montenegro.\n- Assesses the regulatory and supervisory framework and the insolvency and creditor rights regime.\n- Makes recommendations for strengthening the framework.\n- Notes that the local and regional boom-bust cycle has left a legacy of high NPLs in Montenegro."
    },
    {
      "heading": "Scope of assessment",
      "content": "- Evaluates the legal, regulatory, and supervisory regimes in four key areas:\n  - (1) Creditor rights and enforcement systems (for secured and unsecured credit).\n  - (2) Debt recovery and informal enterprise workout practices.\n  - (3) Formal insolvency system (liquidation and reorganization proceedings).\n  - (4) Effectiveness of the relevant institutional, regulatory, and supervisory frameworks in implementing laws, regulations, and supervisory requirements in this area."
    },
    {
      "heading": "Key findings (as presented)",
      "content": "- High levels of nonperforming loans persist, driven by a local and regional boom-bust cycle.\n- Weaknesses identified across:\n  - Creditor rights and enforcement systems for secured and unsecured credit.\n  - Debt recovery practices and the capacity for informal enterprise workouts.\n  - Formal insolvency procedures, including liquidation and reorganization.\n  - Institutional, regulatory, and supervisory effectiveness in implementing relevant laws and requirements."
    },
    {
      "heading": "Policy recommendations (overall emphasis)",
      "content": "- Strengthen creditor rights and enforcement systems to improve recovery for secured and unsecured credit.\n- Enhance frameworks and incentives for debt recovery and informal enterprise workouts.\n- Reform insolvency procedures to improve the effectiveness of liquidation and reorganization proceedings.\n- Improve institutional, regulatory, and supervisory capacity to implement laws, regulations, and supervisory requirements related to NPL resolution."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Asset and liability management; Banking; Collateral; Debt restructuring; Financial institutions; Loans; Mortgages; Nonperforming loans.\n- Keywords: bank account; Collateral; coverage ratio; CR; credit risk; Debt restructuring; debtor's house exemption; enforcement procedure; enterprise restructuring; ISCR; Loans; management goal; management practice; mortgage registration procedure; Mortgages; Nonperforming loans; NPL portfolio; NPL resolution; promissory note; resolution practice; resolution strategy.\n\n---\n\n Content in this bundle\n\n- cr16200\n  - cr16200 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - cr16200 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: June 28, 2016",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781498325653.002",
    "Examines the current state of nonperforming loans (NPLs) in Montenegro.",
    "Assesses the regulatory and supervisory framework and the insolvency and creditor rights regime.",
    "Makes recommendations for strengthening the framework.",
    "Notes that the local and regional boom-bust cycle has left a legacy of high NPLs in Montenegro.",
    "Evaluates the legal, regulatory, and supervisory regimes in four key areas:",
    "High levels of nonperforming loans persist, driven by a local and regional boom-bust cycle.",
    "Weaknesses identified across:",
    "Strengthen creditor rights and enforcement systems to improve recovery for secured and unsecured credit.",
    "Enhance frameworks and incentives for debt recovery and informal enterprise workouts.",
    "Reform insolvency procedures to improve the effectiveness of liquidation and reorganization proceedings.",
    "Improve institutional, regulatory, and supervisory capacity to implement laws, regulations, and supervisory requirements related to NPL resolution.",
    "Subject: Asset and liability management; Banking; Collateral; Debt restructuring; Financial institutions; Loans; Mortgages; Nonperforming loans.",
    "Keywords: bank account; Collateral; coverage ratio; CR; credit risk; Debt restructuring; debtor's house exemption; enforcement procedure; enterprise restructuring; ISCR; Loans; management goal; management practice; mortgage registration procedure; Mortgages; Nonperforming loans; NPL portfolio; NPL resolution; promissory note; resolution practice; resolution strategy.",
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