Financial Crime World

Moldova’s Financial Accounts System Faces Ambitious Reform

The National Bank of Moldova (NBM) has launched a major reform project aimed at creating a comprehensive system for compiling financial accounts, known as the Financial Accounts Balance Sheets (FABS). The new system will provide a detailed picture of the country’s financial situation, including the activities of its banks, non-bank credit organizations, and other financial institutions.

Background

The NBM has already made significant progress in developing the FABS system, which is expected to be fully operational by 2022. To achieve this goal, the NBM will need to establish a formal technical working group to coordinate data collection and compilation, as well as a steering committee to oversee the project’s progress.

Key Areas of Focus

  • Data Collection: The IMF report highlights several key areas that require attention, including:
    • Collection of data from non-bank credit organizations
    • Collection of data from insurance corporations (currently only 14 companies are covered)
    • Inclusion of “close” corporations, which are not publicly traded and currently remain outside the scope of the financial reporting system
  • Data Quality: The report notes that the National Statistics Bureau (NBS) has been collecting data from non-financial corporations and households, but this information may be discontinued due to a decision by the Ministry of Finance (MOF) to exclude supplementary annexes from financial statements starting in 2020. To mitigate this risk, the NBM recommends that the NBS continue collecting these data or find alternative sources to ensure the completeness and accuracy of FABS accounts for non-financial corporations.

Recommendations

The IMF report concludes by emphasizing the importance of the FABS system in providing a comprehensive picture of Moldova’s financial situation and promoting transparency and stability in the financial sector. The successful implementation of this project will require close coordination among relevant authorities, including the NBM, National Financial Monitoring Agency (NCFM), and NBS.

Next Steps

  • Loan Estimation: The NBM has committed to estimating loans without taking into account provisions for loan losses by March 2020.
  • Data Reporting: The NCFM is expected to introduce two new data items on its report to non-bank credit organizations: information on exchange rates and write-offs.

The successful implementation of the FABS system will provide a comprehensive picture of Moldova’s financial situation, promoting transparency and stability in the financial sector.