Moldova Financial Sector Assessment Program : Oversight and Supervision of Financial Market Infrastructures and Risk Assessment of Central Securities Depositories
The approach taken by authorities in the oversight and supervision of FMIs is important in promoting and maintaining financial stability in Moldova. While well-functioning FMIs can greatly improve the efficiency, transparency, and safety of financi...
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| Format: | Report |
| Language: | English en_US |
| Published: |
Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/10/25149779/moldova-financial-sector-assessment-program-technical-note-oversight-supervision-financial-market-infrastructures-fmis-risk-assessment-central-securities-depositories http://hdl.handle.net/10986/22907 |
| Summary: | The approach taken by authorities in the
oversight and supervision of FMIs is important in promoting
and maintaining financial stability in Moldova. While
well-functioning FMIs can greatly improve the efficiency,
transparency, and safety of financial systems, they can also
concentrate systemic risk, which requires effective
oversight and supervision to achieve public policy
objectives. In the context of Moldova, the authorities are
confronted with a national decision to create a single CSD
that has good governance, robust risk management practices,
and financial soundness. Vulnerabilities in FMIs could
potentially undermine the implementation of monetary policy,
or generate systemic disruptions in the financial markets,
and more widely across the economy. A problem may be
initiated by the inability of a participant to settle its
obligations, or by operational failures of the system as a
whole. The resulting default may be passed on to other
participants, and get transmitted across financial systems
and markets, threatening their stability. This note reviews
the oversight and supervisory framework for FMIs in Moldova.
In this note, FMIs cover payment systems, central securities
depositories, and securities settlement systems. Payment
systems were assessed in the 2008 Republic of Moldova FSAP
Update and are not covered in this note. Securities
registrars, which play a key role in the capital markets,
are not FMIs and are assessed under principle 11 on CSDs of
the PFMIs. The analysis was based on the authorities’
answers to the IMF’s questionnaire, IMF and World Bank
technical assistance reports, and background documentation.
The mission met with representatives from the NBM, NCFM,
MSE, NSD, and independent registrars. This note was prepared
based on the information available in February 2014. The
note includes (i) an overview of the FMIs and description of
past and ongoing reforms, and (ii) an assessment of the main
issues at stake. |
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