Financial Crime World

Moldovan Banking Authority Assesses Suitability of Proposed Acquirers

The National Bank of Moldova (NBM) has developed a comprehensive assessment framework to ensure the sound and prudent management of banks undergoing acquisitions. This framework evaluates the proposed acquirer’s reputation, financial soundness, capacity for compliance with prudential requirements, and potential involvement in money laundering or terrorist financing.

Assessment Criteria

The NBM assesses the proposed acquirer based on four key criteria:

  • Reputation: The proposed acquirer must demonstrate an impeccable reputation and professional competence, taking into account their influence over the target undertaking.
  • Financial Soundness: The proposed acquirer must be financially sound enough to ensure the sound and prudent management of the target bank for at least three years.
  • Capacity for Compliance with Prudential Requirements: The NBM evaluates the target bank’s ability to comply with prudential requirements, including:
    • Capital requirements
    • Liquidity requirements
    • Large exposures limits
  • Anti-Money Laundering and Combating Financing of Terrorism: The NBM assesses the proposed acquirer’s potential involvement in money laundering or terrorist financing.

Basel III Implementation

Moldova has implemented the Basel III framework, leapfrogging Basel II after having put Basel I in place. The Banking Law transposes the Basel III regulations, aligning with international principles and standards.

The NBM has approved several regulations to implement Basel III, including those related to:

  • Bank capital requirements
  • Credit risk treatment
  • Operational risk management
  • Market risk treatment

The new framework emphasizes the availability of capital to cover risks and introduces minimum capital thresholds based on quality.

Conclusion

The National Bank of Moldova’s assessment framework ensures that banks undergoing acquisitions are subject to rigorous scrutiny, ensuring the sound and prudent management of these institutions. The implementation of Basel III further strengthens the banking sector’s resilience and ability to withstand systemic crises.