Republic of Montenegro: Financial System Stability Assessment
February 4, 2008
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Montenegro is undergoing rapid credit growth in the context of heavy foreign bank presence and euro use. However, the rate of credit expansion is testing the limits of banks’ capacity to underwrite loans prudently and maintain adequate buffers. Rapid credit growth is now also posing supervisory challenges, despite relatively strong financial sector regulation and supervision. The recommended policy response is a mix of prudential strengthening required to address risks emanating from rapid credit growth, and measures to address specific vulnerabilities.
Subject: Banking, Capital adequacy requirements, Commercial banks, Credit, Credit risk, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Money, Stress testing
Keywords: adequacy level, bank funding, bank lending, banking sector, banking system, Capital adequacy requirements, capital market, Commercial banks, CR, Credit, credit risk, Credit risk, financial system, ISCR, liquidity ratio, problem bank resolution procedure, prudential liquidity management, risk management practice, state-enterprise deposit placement, Stress testing, treasury bill
Pages:
38
Volume:
2008
DOI:
Issue:
050
Series:
Country Report No. 2008/050
Stock No:
1MNEEA2008003
ISBN:
9781451826722
ISSN:
1934-7685
