NBS steps up banking supervisions in cooperation with IMF

BELGRADE - The National Bank of Serbia (NBS) announced on Monday that it will launch an initiative aimed at improving the framework for resolving the issues of problematic banks, and taking action with a view to solving the issue of the high level of problematic loans.

In the light of the forthcoming three-year stand-by arrangement with the IMF, the NBS will implement the so-called special diagnostic study of banks operating in Serbia in cooperation with the IMF, the central bank released on its website.
The methodology used in this case will be comparable to the one implemented by the ECB as a single supervisor for the EU.

The key methodological aspects and diagnosis will be defined and agreed in cooperation with the IMF. They will focus primarily on the fact that banks are due to apply the International Financial Reporting Standards (IFRS), including the promotion of the implementation of international standards of assessment in the evaluation of real estate.

In addition to solving the issue of bad loans, the central bank said that the diagnostic study is expected to ensure greater transparency of the balance sheet positions of banks in terms of their valuation in accordance with the IFRS.

Moreover, it is expected that the study will ensure the assessment of potential needs for additional capital at certain banks, including early detection of the need for effective and timely restructuring of certain banks in accordance with the new framework for the bank restructuring introduced recently through the amendments to the Law on Banks and general building of confidence in the financial position of domestic banks and the capacities of supervisors to effectively monitor the banking system.

Photo Tanjug, M. Jelesijevic ...