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Republic of Montenegro: Financial System Stability Assessment
Author:
International Monetary Fund
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2008: Issue 050
Language:
English
Publication Date:
04 Feb 2008
DOI:
https://doi.org/10.5089/9781451826722.002
ISBN:
9781451826722
ISSN:
1934-7685
Pages:
38
Keywords:
ISCR; CR; capital market; banking system; problem bank resolution procedure; risk management practice; state-enterprise deposit placement; financial system; credit risk; liquidity ratio; bank lending; prudential liquidity management; treasury bill; banking sector; adequacy level; bank funding; Credit; Credit risk; Stress testing; Commercial banks; Capital adequacy requirements
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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.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund