{ "title": "Montenegro: Financial System Stability Assessment", "publication": "IMF Staff Country Reports, March 23, 2016", "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2016/12/31/montenegro-financial-system-stability-assessment-43820", "canonical": "https://www.imf.org/en/publications/cr/issues/2016/12/31/montenegro-financial-system-stability-assessment-43820", "overlayPath": "/en/publications/cr/issues/2016/12/31/montenegro-financial-system-stability-assessment-43820/index.md", "summary": "This paper focuses on the important issues of Montenegro economy which are as follows: microfinancial setting, financial system resilience, financial oversight, resolution of nonperforming loans, and financial safety nets.", "sections": [ { "heading": "Overview", "content": "- This paper focuses on the important issues of Montenegro economy which are as follows: microfinancial setting, financial system resilience, financial oversight, resolution of nonperforming loans, and financial safety nets.\n- Montenegro is still dealing with the aftermath of the collapse of the lending boom in 2008.\n- Economic momentum has accelerated in 2015, but there are numerous downside risks.\n- System-wide solvency and liquidity indicators appear broadly sound, but significant pockets of vulnerabilities exist among domestically owned banks.\n- Decisive action to deal with weak banks is critical for preserving financial stability.\n- While the legal, regulatory, and supervisory frameworks for banking and insurance sector have markedly improved since 2006 Financial Sector Assessment Program, further progress is required." }, { "heading": "Key findings and diagnostics", "content": "- Post-2008 lending boom collapse continues to affect the economy and financial sector.\n- 2015 saw accelerated economic momentum, but this is accompanied by numerous downside risks.\n- System-wide solvency and liquidity indicators: described as \"broadly sound\" in aggregate.\n- Concentrated vulnerabilities: significant pockets of weakness exist specifically among domestically owned banks.\n- Nonperforming loans and their resolution are core concerns for financial stability." }, { "heading": "Risks and vulnerabilities", "content": "- Legacy effects from the 2008 lending boom collapse remain material for the financial system.\n- Domestically owned banks exhibit concentrated solvency and/or liquidity weaknesses despite broadly sound system-wide indicators.\n- Downside risks to the economic outlook could exacerbate asset-quality and funding strains." }, { "heading": "Policy recommendations and priorities", "content": "- Take decisive action to deal with weak banks to preserve financial stability.\n- Continue strengthening the legal, regulatory, and supervisory frameworks for the banking and insurance sectors; further progress is required beyond improvements made since the 2006 Financial Sector Assessment Program.\n- Address resolution of nonperforming loans and enhance financial safety nets as part of a comprehensive stability strategy." }, { "heading": "Subjects and keywords (as presented)", "content": "- Subject: Asset and liability management, Bank resolution framework, Banking, Commercial banks, Credit, Financial crises, Financial institutions, Liquidity, Money, Nonperforming loans\n- Keywords: a number of bank, asset, bank, bank relationship management, bridge bank, camel rating, camel-rated bank, CBM oversight function, CBM payment system, CBM-managed payment, Commercial banks, CR, Credit, excessive risk aversion, funding, Global, ISCR, Liquidity, liquidity contingency plans, Nonperforming loans, private sector, relationship management, resolution planning\n\n---\n\n Content in this bundle\n\n- Montenegro: Financial System Stability Assessment; IMF Country Report 16/88; February 8, 2016\n - Montenegro: Financial System Stability Assessment; IMF Country Report 16/88; February 8, 2016 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Montenegro: Financial System Stability Assessment; IMF Country Report 16/88; February 8, 2016 (PDF){rel=\"external\" type=\"application/pdf\"}" } ], "bullets": [ "[Markdown version](/en/publications/cr/issues/2016/12/31/montenegro-financial-system-stability-assessment-43820/index.md)", "[Structured JSON version](/en/publications/cr/issues/2016/12/31/montenegro-financial-system-stability-assessment-43820/index.json)", "[Bundle manifest](/en/publications/cr/issues/2016/12/31/montenegro-financial-system-stability-assessment-43820/bundle-manifest.json)", "Published: March 23, 2016", "Series: IMF Staff Country Reports", "DOI: https://doi.org/10.5089/9781475519815.002", "This paper focuses on the important issues of Montenegro economy which are as follows: microfinancial setting, financial system resilience, financial oversight, resolution of nonperforming loans, and financial safety nets.", "Montenegro is still dealing with the aftermath of the collapse of the lending boom in 2008.", "Economic momentum has accelerated in 2015, but there are numerous downside risks.", "System-wide solvency and liquidity indicators appear broadly sound, but significant pockets of vulnerabilities exist among domestically owned banks.", "Decisive action to deal with weak banks is critical for preserving financial stability.", "While the legal, regulatory, and supervisory frameworks for banking and insurance sector have markedly improved since 2006 Financial Sector Assessment Program, further progress is required.", "Post-2008 lending boom collapse continues to affect the economy and financial sector.", "2015 saw accelerated economic momentum, but this is accompanied by numerous downside risks.", "System-wide solvency and liquidity indicators: described as \"broadly sound\" in aggregate.", "Concentrated vulnerabilities: significant pockets of weakness exist specifically among domestically owned banks.", "Legacy effects from the 2008 lending boom collapse remain material for the financial system.", "Domestically owned banks exhibit concentrated solvency and/or liquidity weaknesses despite broadly sound system-wide indicators.", "Downside risks to the economic outlook could exacerbate asset-quality and funding strains.", "Take decisive action to deal with weak banks to preserve financial stability.", "Continue strengthening the legal, regulatory, and supervisory frameworks for the banking and insurance sectors; further progress is required beyond improvements made since the 2006 Financial Sector Assessment Program.", "Address resolution of nonperforming loans and enhance financial safety nets as part of a comprehensive stability strategy.", "Subject: Asset and liability management, Bank resolution framework, Banking, Commercial banks, Credit, Financial crises, Financial institutions, Liquidity, Money, Nonperforming loans", "Keywords: a number of bank, asset, bank, bank relationship management, bridge bank, camel rating, camel-rated bank, CBM oversight function, CBM payment system, CBM-managed payment, Commercial banks, CR, Credit, excessive risk aversion, funding, Global, ISCR, Liquidity, liquidity contingency plans, Nonperforming loans, private sector, relationship management, resolution planning", "**Montenegro: Financial System Stability Assessment; IMF Country Report 16/88; February 8, 2016**" ], "related": [ { "title": "Montenegro: Financial System Stability Assessment; IMF Country Report 16/88; 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