IMF Staff Country Reports

Republic of Montenegro: Financial System Stability Assessment

February 4, 2008

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International Monetary Fund. Monetary and Capital Markets Department "Republic of Montenegro: Financial System Stability Assessment", IMF Staff Country Reports 2008, 050 (2008), accessed December 3, 2024, https://doi.org/10.5089/9781451826722.002

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Summary

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

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